Exhibit 10.20

                                                          As of January 24, 2000

Mr. John M. Needham
43 Fairwood Road
Madison, New Jersey 07940


Dear Jack:

     This will confirm the terms and conditions of employment (the  "Agreement")
between you and Candie's, Inc. (the "Company") (each a "Party" and together, the
"Parties"). It is agreed as follows:

     1.   Term.

     The Company will employ you for an initial period commencing on January 24,
2000 and ending on January 26, 2001 (the "Initial  Term").  This  agreement will
automatically  renew for 3 month  intervals  (the "  Additional  Term"),  unless
written notice is provided on the 3 month anniversary of the agreement  starting
June 24, 2000. This notice is to act as a minimum severance of three months.

     2.   Title; Duties.

     You shall render  services to the Company on a full-time  basis as the Vice
President of Finance. Your duties and responsibilities  shall be consistent with
the duties customarily  undertaken by the senior financial management officer of
a public ally traded corporation.

     3.   Compensation.

     (a) Base Salary. Your base salary for the initial term will be at a rate of
not less than $170,000 per annum paid in accordance  with the Company's  payroll
practices and policies.

     (b) Bonus.  You are entitled to a signing bonus of $ 10,000 payable January
24, 2000.  Your cash bonus for the initial term and each following  fiscal years
will be  discretionary,  based upon  annually  established  company and personal
objectives. This bonus will be payable upon filing the annual 10-k.

     (c) Stock  Options.  On  January  24,  2000,  you shall  receive a grant of
qualified stock options  pursuant to the Company's most recently  adopted option
plan for 75,000 shares of the Company's common stock,  exercisable on the latest
date  possible  under such plan,  at a price equal to the  closing  price of the
stock on January  24,2000.  The  options  shall vest and become  exercisable  as
follows:  25,000 on January 24,  2001,  25,000 on January 24, 2002 and 25,000 on
January 24, 2003. If the Company  terminates  you prior to the expiration of the
Term for a reason  other than  "Cause"  (as defined  herein),  or you resign for
"Good  Reason" (as defined  herein),  all options  shall vest upon the date such
termination is effective.

     (d) The Company shall lease a car for you with monthly  lease  payments not
to exceed $725. The Company shall,  in addition,  reimburse you for all parking,
maintenance,  repairs, insurance, gas, tolls and other related expenses promptly
upon your submission of appropriate documentation.


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4.   Benefits and Expenses.

     (a) You shall be  permitted  during the Term to  participate  (without  any
waiting periods) in any and all benefit plans, hospitalization, medical, health,
disability,  officer/director or employee liability insurance plans, pension and
401K plans or other benefit plans (including any to-be-established  bonus plans)
on the same terms and conditions as extended to other executive  officers of the
Company.

     (b) The  Company  shall  promptly  reimburse  you for  all  reasonable  and
necessary travel and entertainment expenses and other disbursements or costs you
may incur in connection with promoting the business of the Company.


     (c) You shall be entitled to three weeks paid vacation per year. If, in any
year, you do not take some or all of your vacation, such unused days may only be
banked  with  written  consent and  carried  over into the next year,  as may be
applicable.

     (d) You shall be permitted to attend such professional conferences, receive
such professional publications, acquire such professional books and materials to
build a library, and receive such other facilities and support as are reasonable
and  necessary  to and  perform  your  duties  and  maintain  active  status  in
accounting and legal professions.

     5.   Termination.

     (a)  Your  employment  may  be  terminated  by  the  Company  prior  to the
expiration  of the Term of this  agreement  only for "Cause" by giving you prior
written notice of the basis for the proposed termination and a reasonable chance
to cure.  As used in this  agreement,  the term  "Cause"  shall  mean:  (a) your
willful and  continuing  malfeasance  and  failure to perform  having a material
adverse  effect  on the  Company;  (b)  your  willful  engagement  in  fraud  or
dishonesty  against the Company having a material adverse effect on the Company;
or (c) your conviction of a felony involving moral turpitude.

     (b) You may  terminate  this  Agreement  at any time for "Good  Reason"  by
giving  the  Company  prior  written  notice  of  the  basis  for  the  proposed
termination and a reasonable chance to cure. "Good Reason" shall mean any of the
following:  (i) a breach by the Company of any of its payment obligations to you
hereunder;  (ii)  relocation of the Company outside a 50-mile radius of New York
City unless the Company shall provide you with a suitable location from which to
work within such radius; (iii) a proposed material  modification or reduction of
your duties or position as a senior  financial  executive;  (iv) the bankruptcy,
reorganization  or liquidation of the Company;  or (v) a "Change of Control".  A
"Change of Control"  shall mean:  (1) an  occurrence  resulting in any person or
entity other than an existing  subsidiary or affiliate of the Company  acquiring
or being the beneficial owner of 20% of more of the combined voting power of the
Company's outstanding securities resulting in Neil Cole no longer being Chairman
of the Board; (2) Neil Cole no longer occupying a position as a senior executive
of the Company;  or (3) the  acquisition of the Company by, or the merger of the
Company into or with,  an entity other than an existing  subsidiary or affiliate
of the Company.


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6.   Effect of Termination.

     (a) Upon  termination  of your  employment for Cause (or upon your death or
disability,   rendering   you  unable  to  perform),   you  (or  your  heirs  or
representatives) shall receive any accrued salary,  pro-rated bonus and vacation
due  through  the date of  termination  and be  reimbursed  for any  outstanding
business  expenses  (including those relating to your car) incurred prior to the
date of termination. Upon your death or disability, you or your heirs shall also
be entitled to continuation of health and medical benefits for 6 months from the
date of termination.

     (b) Upon  termination of your employment not for Cause, or if you terminate
for Good Reason,  you shall receive your full compensation  (salary,  bonus, car
allowance,  vacation  and the  continuance  of all other  benefits)  through the
unexpired  portion of the Term, but in no event for a period less than 6 months,
payable in equal  monthly  installments  following the date of  termination.  In
addition, all unvested options shall vest on the date of termination.

     (c) Upon  termination of your employment upon the occurrence of a Change of
Control,  you shall  receive all the  amounts  set forth in 6(b) above,  plus an
amount  equal to one full year of your base  salary at the rate in effect at the
time that the Change of Control occurs.

     7.   Confidentiality

You acknowledge that,  during the course of your employment by the Company,  you
will have access to valuable confidential information, including but not limited
to: customers and prospects lists, cost lists,  merchandising data,  inventions,
designs,  manufacturing  methods  and  techniques  and other  information  which
relating to the  activities  and  business  of the  Company  and its  affiliates
("Confidential  Material").  You agree that such Confidential  Material shall be
and remain the Company's property,  free of any rights on your part with respect
thereto,  and that you  shall  keep it  confidential  at all times  during,  and
following  the  cessation  of your  employment  with the  Company.  You agree to
deliver to the Company all computer files and tapes,  books record and documents
(whether maintained in paper, electronic or other medium) relating to or bearing
upon any such Confidential Material, upon the cessation of your employment,  and
you agree not to retain any copies or extracts.

     8.   Miscellaneous

     (a) This agreement shall be governed by the laws of New York and each Party
agrees  that in the event of a dispute  relating  to the terms  hereof the other
will submit to the exclusive jurisdiction of the state or federal courts sitting
within the City of New York.

     (b) If not terminated in accordance with its terms, this Agreement shall be
binding  upon,  and inure to the benefit of, the  Parties,  their  heirs,  legal
representatives, successors and permitted assigns.

     (c) The invalidity or unenforceability of any provision hereof shall not in
any way affect the  validity  or  enforceability  of any other  provision.  This
Agreement reflects the entire understanding between the Parties.


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Please sign where  indicated  below,  whereupon  this letter will  constitute  a
binding agreement between the Parties as of the date first above written.

Candies, Inc.


By: /s/ Neil Cole                                 /s/ John Needham
    -----------------------                       -------------------------
    Neil Cole                                         John M. Needham
    Chief Executive Officer