Exhibit 10.9

                     FOURTH AMENDMENT TO FINANCING AGREEMENT


     This Fourth Amendment to Financing  Agreement (this "Amendment") is entered
into as of this 16th day of September,  2002 among FACTORY 2-U STORES, INC., a
Delaware corporation  ("Company"),  the Lenders who are a party to the Financing
Agreement referred to below (collectively, "Lenders") and THE CIT GROUP/BUSINESS
CREDIT, INC., a New York corporation ("Agent"), in its capacity as Agent for the
Lenders, with reference to the following facts:

A.   Agent,  Company and Lenders  previously entered into that certain Financing
     Agreement  dated as of March 3,  2000,  as amended  by that  certain  First
     Amendment to Financing  Agreement  dated as of April 13, 2000, that certain
     Second Amendment to Financing Agreement dated as of April 10, 2001 and that
     certain Third  Amendment to Financing  Agreement  dated as of April 9, 2002
     (collectively,  the "Financing Agreement"),  pursuant to which Lenders have
     provided Company with certain loans and other financial accommodations.

B.   Company has requested that Agent and Lenders amend the Financing  Agreement
     to, among other things,  extend the term of the Financing  Agreement  until
     March 3, 2006.

C.   Agent and Lenders are willing to amend the Financing Agreement on the terms
     and subject to the conditions set forth in this Amendment.

     NOW  THEREFORE,  in  consideration  of the  foregoing  and  the  terms  and
conditions hereof,  the parties do hereby agree as follows,  effective as of the
date set forth above:

1.   Definitions. Terms used herein, unless otherwise defined herein, shall have
     the meanings set forth in the Financing Agreement.

2.   Amendments to Financing Agreement.

(a)  The  definition of  "Availability"  set forth in Section 1 of the Financing
     Agreement  is  hereby  amended  and  restated  in its  entirety  to read as
     follows:

          "Availability  shall mean at any time the lesser of: (a) the excess of
     the Borrowing Base over the sum of (x) the outstanding  aggregate amount of
     all  Obligations,  including,  without  limitation,  all  Obligations  with
     respect to  Revolving  Loans and  Letters of Credit,  (y) the  Availability
     Reserve and (z) $7,500,000; or (b) the excess of $50,000,000,  over the sum
     of (x) the  outstanding  aggregate  amount of all  Obligations,  including,
     without  limitation,  all  Obligations  with respect to Revolving Loans and
     Letters of Credit and (y) the Availability Reserve."


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<PAGE>

(b)  The definition of "Borrowing  Base" set forth in Section 1 of the Financing
     Agreement  is  hereby  amended  and  restated  in its  entirety  to read as
     follows:

          "Borrowing  Base  shall  mean   (calculated   without  regard  to  the
     $50,000,000  line of credit  maximum)  the sum of (a)  eighty-five  percent
     (85%) of the outstanding  Eligible Accounts  Receivable of the Company plus
     (b)  the  aggregate  value  of  Eligible  Inventory   (including   Eligible
     In-Transit  Inventory)  determined  at the  lower  of cost or  market  on a
     first-in,  first-out basis multiplied by the Inventory Advance  Percentage;
     provided  that,  in no event shall  advances  against  Eligible  In-Transit
     Inventory exceed the lesser of (A) $5,000,000 or (B) forty percent (40%) of
     the aggregate value of Eligible Inventory."

(c)  The definition of "Chase  Manhattan Rate" set forth in Section 1 of the
     Financing  Agreement is hereby amended and restated in its entirety to read
     as follows:

          "Chase  Manhattan  Rate  shall  mean the rate of  interest  per  annum
     announced  by  JPMorgan  Chase  Bank from time to time as its prime rate in
     effect at its  principal  office in New York  City.  (The prime rate is not
     intended to be the lowest rate of interest  charged by JPMorgan  Chase Bank
     to its borrowers.)"

(d)  The definition of "Early Termination Fee" set forth in Section 1 of the
     Financing  Agreement is hereby amended and restated in its entirety to read
     as follows:

          "Early  Termination Fee shall:  (a) mean the fee the Agent is entitled
     to charge the Company in the event the Line of Credit (including the Letter
     of Credit  Sub-Line) or this  Financing  Agreement is  terminated on a date
     prior to an Anniversary Date; and (b) be determined by multiplying the Line
     of Credit (including the Letter of Credit Sub-Line) by (i) one percent (1%)
     if the Early Termination Date occurs on or prior to March 2, 2004, and (ii)
     one-half of one percent (0.5%) if the Early  Termination  Date occurs after
     March 2, 2004, but on or prior to March 2, 2005."

(e)  The definition of "Inventory Advance Percentage" set forth in Section 1
     of the Financing  Agreement is hereby  amended and restated in its entirety
     to read as follows:

          "Inventory  Advance  Percentage  shall mean the lower of: (a)  seventy
     percent  (70%)  of  the  aggregate  value  of  Eligible  Inventory,  or (b)
     eighty-five  percent  (85%)  of the Net  Orderly  Liquidation  Value of the
     Inventory as a percentage of the total  Inventory as determined by the most
     recent Inventory appraisal, a provided for in Section 7.13 hereof."


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<PAGE>

(f)  The following  definition of "Triggering  Availability" is hereby added
     to Section 1 of the Financing Agreement in proper alphabetical order:

          "Triggering  Availability  shall  mean at any time the  excess  of the
     Borrowing Base, over the sum of (x) the outstanding aggregate amount of all
     Obligations, including, without limitation, all Obligations with respect to
     Revolving Loans and Letters of Credit, and (y) the Availability Reserve."

(g)  The second  paragraph  of Section  3.4 of the  Financing  Agreement  is
     hereby amended and restated in its entirety to read as follows:

          "The  Company  may and will  enforce,  collect and receive all amounts
     owing on the Accounts and/or  received from sales or other  dispositions of
     Inventory  at  the  Company's  expense,  and  may  manage  and  direct  its
     Depository Accounts;  however such privilege shall terminate  automatically
     upon the institution by or against the Company of any proceeding  under any
     bankruptcy or  insolvency  law or, at the election of the Agent in its sole
     discretion:  (x) if  Triggering  Availability  is at  any  time  less  than
     $10,000,000  and at all  times  thereafter  until  such  time  the  Company
     maintains  minimum  Triggering  Availability of $10,000,000 for a period of
     ninety (90) consecutive days, or (y) upon the occurrence of any other Event
     of Default and until such Event of Default is waived in writing by Agent or
     cured to Agent's satisfaction."

(h)  The second sentence of Section 7.2 of the Financing Agreement is hereby
     amended and restated in its entirety to read as follows:

          "The  Company  agrees  that the Agent or its agents may enter upon the
     Company's  premises with reasonable  notice (such notice not being required
     if an Event of Default has occurred and is  continuing)  at any time during
     normal  business  hours,  and from time to time, but not more than twice in
     any twelve (12) month period, for the purpose of inspecting the Collateral,
     and any and all records pertaining thereto; provided however, (x) if at any
     time  Triggering  Availability  is less than  $20,000,000  and at all times
     thereafter  until  such  time  the  Company  maintains  minimum  Triggering
     Availability of $20,000,000 for a period of ninety (90) consecutive days or
     (y) upon the occurrence of any Event of Default and while it is continuing,
     Agent shall not be limited in the number of times it or its agent may enter
     upon the Company's premises."

(i)  The last sentence of Section 7.3 of the  Financing  Agreement is hereby
     amended and restated in its entirety to read as follows:

          "At any time the Triggering  Availability is less than  $10,000,000 or
     upon the occurrence and during the continuance of any Event of Default, the
     Company  shall,  upon demand by Agent,  provide the reports listed above as
     (a) and (b) on a weekly basis."


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<PAGE>

(j)  Clause  (3) of  Section  7.9(i) of the  Financing  Agreement  is hereby
     amended and restated in its entirety to read as follows:

          "(3) notwithstanding clauses (1) and (2) above, the Company may prepay
     Subordinated Debt to the extent Triggering Availability after giving effect
     to such  prepayment  exceeds  $15,000,000,  provided  that the  Company has
     maintained   a  trailing   twelve(12)   month   EBITDA  of  not  less  than
     $30,000,000."

(k)  The financial  covenant relating to the Company's Tangible Net Worth is
     hereby eliminated and accordingly,  Section 7.10 of the Financing Agreement
     is hereby amended and restated in its entirety to read as follows:

          "7.10 Reserved."

(l)  The first sentence of Section 7.13 of the Financing Agreement is hereby
     amended and restated in its entirety to read as follows:

          "The Company has  provided to the Agent,  and agrees to provide to the
     Agent on an  annual  basis  commencing  with the first  anniversary  of the
     Closing Date, an appraisal  indicating the Net Orderly Liquidation Value of
     the Inventory;  provided however, if at any time Triggering Availability is
     less than  $20,000,000  and at all  times  thereafter  until  such time the
     Company  maintains  minimum  Triggering  Availability  of $20,000,000 for a
     period of ninety (90)  consecutive  days, such appraisals shall be provided
     on a semi-annual basis;  provided further however,  upon the occurrence and
     continuance of an Event of Default,  such  appraisals  shall be provided as
     frequently as Agent may reasonably request."

(m)  The grid set forth in Section 8.1 of the Financing  Agreement is hereby
     amended and restated in its entirety to read as follows:


                                                Libor Rate            Chase
     Level        EBITDA                           plus        Or     Manhattan
                                                                      Rate plus
     ------ ---------------------------------- ------------- ------ ------------
     I      Greater than $28,000,000               1.50%       or      0.00%
     ------ ---------------------------------- ------------- ------ ------------
     II     Greater than $20,000,000 but
            less than or equal to $28,000,000      1.75%       or      0.00%
     ------ ---------------------------------- ------------- ------ ------------
     III    Greater than $15,000,000 but
            less than or equal to $20,000,000      2.00%       or      0.00%
     ------ ---------------------------------- ------------- ------ ------------
     IV     Greater than $10,000,000 but
            less than or equal to $15,000,000      2.25%       or      0.25%
     ------ ---------------------------------- ------------- ------ ------------
     V      Greater than $5,000,000 but
            less than or equal to $10,000,000      2.50%       or      0.50%
     ------ ---------------------------------- ------------- ------ ------------
     VI     Less than or equal to $5,000,000       3.00%       or      1.00%
     ------ ---------------------------------- ------------- ------ ------------


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<PAGE>

(n)  The last sentence of Section 8.1 of the  Financing  Agreement is hereby
     amended and restated in its entirety to read as follows:

          "Notwithstanding  anything to the contrary contained herein, (x) in no
     event shall the interest rate  applicable  hereunder  decrease by more than
     one-quarter  percent  (0.25%)  within  any six (6) month  period and (y) if
     Triggering  Availability exceeds $30,000,000 at all times during any fiscal
     quarter and no Event of Default shall have occurred and be continuing as at
     the end of such fiscal quarter,  the interest rate applicable hereunder for
     the three-month  period commencing  immediately after such quarter shall be
     decreased by one-quarter of one percent (0.25%)."

(o)  The grid set forth in Section 8.8 of the Financing  Agreement is hereby
     amended and restated in its entirety to read as follows:


              Date of Payment                            Amount of Payment
     -------------------------------------------    ----------------------------
     On the Closing Date                                     $25,000
     -------------------------------------------   -----------------------------
     On each of the first, second, third, fourth         $40,000 per year
     and fifth anniversaries of the Closing Date
     -------------------------------------------   -----------------------------

(p)  Section 11.1 of the Financing  Agreement is hereby amended and restated
     in its entirety to read as follows:

          "11.1 This Financing  Agreement shall become  effective as of the date
     set forth on the first  page  hereof and shall  continue  in full force and
     effect for the initial term ending six (6) years from the Closing Date (the
     "Anniversary Date") and from year to year thereafter (each, an "Anniversary
     Date"), unless sooner terminated pursuant to the terms hereof."

3.   Fee. In consideration of the foregoing  amendment,  Company shall pay to
     Agent,  for the pro-rata  benefit of Lenders,  an amendment fee of $162,500
     (the "Amendment  Fee").  The Amendment Fee shall be fully earned by Lenders
     as of the date  hereof  and  shall be  payable  and  charged  to  Company's
     Revolving Loan Account as follows: $81,250 upon execution of this Amendment
     by Company and $81,250 upon the earlier of March 3, 2003 or the termination
     of the Financing Agreement.

4.   Conditions Precedent. The effectiveness of the foregoing amendment shall
     be, and hereby is, subject to the  fulfillment to Agent's  satisfaction  of
     the Conditions Precedent. The "Conditions Precedent" shall mean each of the
     following:

(a)  Receipt by Agent of this Amendment duly executed by each of the parties
     hereto;

(b)  Receipt by Agent of a fully executed  Assignment and Transfer Agreement
     whereby Fleet Retail Finance Inc. shall reassign its rights and obligations
     as a Lender under the Financing Agreement to The CIT Group/Business Credit,
     Inc.;


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<PAGE>

(c)  Company  shall have paid to Agent the portion of the Amendment Fee that
     is due upon execution of this Amendment by Company; and

(d)  As of the date hereof, the representations and warranties  contained in
     Section 7 of the Financing Agreement are (before and after giving effect to
     this  Amendment) true and correct in all material  respects  (except to the
     extent any such  representation  and warranty is  expressly  stated to have
     been made as of a specific date, in which case it shall be true and correct
     as of such  specific  date) and no  Default  or Event of  Default  shall be
     existing or have occurred and be continuing.

5.   Miscellaneous.

(a)  Reference to and Effect on the Financing Agreement.

     (i)   Except as specifically amended by this Amendment and the documents
     executed and delivered in  connection  herewith,  the  Financing  Agreement
     shall remain in full force and effect and is hereby ratified and confirmed.

     (ii)  The execution and delivery of this Amendment shall not, except as
     expressly  provided  herein,  constitute a waiver of any  provision  of, or
     operate  as a waiver of any  right,  power or remedy of Agent or any Lender
     under the  Financing  Agreement or any  agreement  or document  executed in
     connection therewith.

     (iii) Upon the Conditions  Precedent being  satisfied,  this Amendment
     shall be construed as one with the existing  Financing  Agreement,  and the
     existing Financing Agreement shall, where the context requires, be read and
     construed throughout so as to incorporate this Amendment.

(b)  Fees and Expenses.  The Borrower  acknowledges that all costs, fees and
     expenses  incurred  in  connection  with  this  Amendment  will  be paid in
     accordance with Section 8.5 of the Financing Agreement.

(c)  Headings.  Section  and  subsection  headings  in this  Amendment  are
     included for  convenience of reference only and shall not constitute a part
     of this Amendment for any other purpose or be given any substantive effect.

(d)  Counterparts.   This  Amendment  may  be  executed  in  one  or  more
     counterparts,  each of which shall be deemed an  original  but all of which
     together shall constitute one and the same instrument.

(e)  Governing  Law.  This  Amendment  shall be governed  by and  construed
     according to the laws of the State of California.


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<PAGE>


     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

                                    Company:

                                    FACTORY 2-U STORES, INC.


                                    /s/Douglas C. Felderman
                                    -----------------------
                                    Name:  Douglas C. Felderman
                                    Title: Executive Vice President and
                                           Chief Financial Officer


                                    Agent and Lender:

                                    THE CIT GROUP/BUSINESS CREDIT, INC.


                                    /s/James J. Karnowski
                                    ------------------------
                                    Name:  James J. Karnowski
                                    Title: Vice President

















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