AMENDMENT NO. 1
                  Dated as of September 11, 1997

                             to the

              AMENDED AND RESTATED CREDIT AGREEMENT
                    Dated as of May 23, 1996

     
     WHEREAS, LECHTERS, INC. ("the Borrower"), the BANKS listed
on signature pages to the Amended and Restated Credit Agreement
(the "Banks") and THE BANK OF MONTREAL, as Agent (the "Agent")
are parties to the Amended and Restated Credit Agreement, dated
as of May 23, 1996 (the "Credit Agreement"); and
     
     WHEREAS, the Borrower, the Banks and the Agent wish to amend
the Credit Agreement in the manner hereinafter set forth;
     
     NOW, THEREFORE, in consideration of the mutual covenants,
agreements, and promises herein contained and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Banks and the Agent agree
as follows:
     
     Section 1.  Definitions.  Terms used in this Amendment No. 1
that are defined in the Credit Agreement are used with the
meanings therein ascribed to them.
     
     Section 2.  Amendments.  Upon and after the Effective Date
(as defined in Section 3 hereof), the Credit Agreement shall be
amended as follows:
          
          (a)  Section 1.7(b) shall be amended by inserting the
     words "or amendment" immediately after the words "90 days
     after the issuance" appearing in line 14 thereof;
          
          (b)  Section 4.11 shall be deleted in its entirety and
     the following substituted therefor:
                    
                    "Section 4.11.  Dividends, Stock Purchases.
                    
                    (a)  Declare or pay any dividends, either in
               cash or property, on any shares of its capital
               stock of any class (except dividends or other
               distributions payable solely in shares of common
               stock of the Borrower); or
                    
                    (b)  Directly or indirectly, or through any
               Subsidiary, purchase, redeem or retire any shares
               of its capital stock of any class or any warrants,
               rights or options to purchase or acquire any
               shares of its capital stock; or
                    
                    (c)  Make any other payment or distribution,
               either directly or indirectly or through any
               Subsidiary, in respect of capital stock of the
               Borrower; or
                    
                    (d)  Make, directly or indirectly, or permit
               any Subsidiary to make, any Restricted Investment;
               
               except that the Borrower may (A) declare and pay
               preferred dividends not to exceed 6% per annum in
               respect of the Perpetual Convertible Preferred
               Stock, and (B) during such time as no Default or
               Event of Default has occurred and is continuing,
               purchase, redeem or retire up to one million
               shares in the aggregate of its common stock
               subsequent to the Effective Date.";
          
          (c)  Section 10.1 shall be amended by deleting the
     definition of "Consolidated Fixed Charges" in its entirety
     and substituting therefor the following definition:
                    
                    "'Consolidated Fixed Charges' means, for any
               period, the sum of (a) the aggregate amount of
               principal payments of Indebtedness scheduled to
               have been made by the Borrower and the
               Consolidated Subsidiaries during such period,
               determined on a consolidated basis, (b) to the
               extent deducted in determining Consolidated Net
               Income for such period, interest expense and rent
               expense, (c) capital expenditures and (d) the
               aggregate amount expended to purchase, redeem or
               retire the common stock of the Borrower.";
          
          (d)  Section 10.1 shall be amended by deleting the
     definition of "Restricted Investment" in its entirety and
     substituting therefor the following definition:
                    
                    "'Restricted Investment" means all
               investments in or loans, advances or extensions of
               credit to any Person by the Borrower or its
               Subsidiaries except the following:
                         
                         (a)  investments, loans and advances by
                    the Borrower and its Subsidiaries in and to
                    Subsidiaries, including any investment in a
                    corporation which, after giving effect
                    thereto, will become a Subsidiary;
                         
                         (b)  investments in property to be used
                    in the ordinary course of business of the
                    Borrower and its Subsidiaries;
                         
                         (c)  investment in direct obligations
                    of, or obligations guaranteed by, the United
                    States of America or an agency thereof,
                    maturing within three years from the date of
                    acquisition thereof;
                         
                         (d)  (x) investments in municipal
                    securities, maturing within three years from
                    the date of acquisition thereof, which are
                    rated in one of the top two rating
                    classifications by Standard & Poor's
                    Corporation, Moody's Investors Services, Inc.
                    or other nationally recognized credit rating
                    agency of similar standing, and (y)
                    investments in debt securities of
                    corporations which are headquartered in the
                    United States, the senior debt securities of
                    which are rated at or above A- by Standard &
                    Poor's Corporation or at A3 or above by
                    Moody's Investors Services, Inc. (or another
                    nationally recognized credit rating agency of
                    similar standing if neither of such two named
                    agencies shall rate such securities);
                         
                         (e)  investments in certificates of
                    deposit, eurodollar time deposits or banker's
                    acceptances maturing within one year from the
                    date of origin, issued by, and bank accounts
                    with, commercial banks organized under the
                    laws of the United States or any state
                    thereof or Canada or any province thereof,
                    and having capital, surplus and undivided
                    profits aggregating at least $100,000,000;
                         
                         (f)  investments in commercial paper
                    maturing within 270 days or less from the
                    date of issuance and rated in one of the top
                    two rating classifications by Standard &
                    Poor's Corporation, Moody's Investors
                    Services, Inc. or other nationally recognized
                    credit rating agency of similar standing;
                         
                         (g)  investments in any investment
                    company having (at the time of investment)
                    assets of not less than $500,000,000 and a
                    substantial portion of the assets of which
                    are limited to investments of a character
                    which would be permitted to be made by the
                    Borrower pursuant to the provisions of
                    paragraphs (c), (d), (e) and (f) of this
                    definition and which shares under GAAP are
                    classified as current assets;
                         
                         (h)  investments in certain issues of
                    preferred stock known by various terms such
                    as "dutch-auction preferred", "capital-market
                    preferred", "remarketed preferred", and
                    "variable rate preferred", or similar terms
                    which, at the time of acquisition by the
                    Borrower or any Subsidiary is rated in one of
                    the top two rating classifications by
                    Standard & Poor's Corporation or Moody's
                    Investors Services, Inc.;
                         
                         (i)  other investments existing as of
                    May 16, 1991, provided that any such
                    investments which are not described in the
                    foregoing paragraphs of this definition are
                    disclosed to the Agent in writing on or prior
                    to the Agreement Date; and
                         
                         (j)  loans to employees of the Borrower
                    or its Subsidiaries, provided that the
                    aggregate outstanding principal amount of
                    such loans shall at no time exceed
                    $1,500,000."

Section 3.  Effective Date.  This Amendment No. 1 shall be
effective as of September 11, 1997 (the "Effective Date") when
each of the following shall have occurred:
          
          (a)  the Borrower, the Banks and the Agent shall have
     executed and delivered this Amendment No. 1; and
          
          (b)  each Representation and Warranty shall be true and
     correct in all material respects at and as of the Effective
     Date after giving effect to this Amendment No. 1.
     
     Section 4.  Representations and Warranties.  The Borrower
hereby represents and warrants to the Banks and the Agent that:
          
          (a)  this Amendment No. 1 has been duly authorized,
     executed and delivered by the Borrower and constitutes a
     legal, valid and binding obligation of the Borrower,
     enforceable against the Borrower in accordance with its
     terms;
          
          (b)  the execution, delivery and performance of this
     Amendment No. 1 does not require any Governmental Approval;
     and
          
          (c)  no Default or Event of Default has occurred and is
     continuing at and as of the Effective Date after giving
     effect to this Amendment No. 1.
     
     Section 5.  Counterparts.  This Amendment No. 1 may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts
shall together constitute one and the same instrument.
     
     Section 6.  Ratification.  Except to the extent hereby
amended, the Credit Agreement is and shall continue to be in full
force and effect and is hereby in all respects confirmed,
approved and ratified.
     
     Section 7.  Captions.  Section captions in this Amendment
No. 1 are included herein for convenience of reference only and
shall not constitute a part of this Amendment No. 1 for any other
purpose or in any way affect the meaning or construction of any
provisions of this Amendment No. 1.
     
     Section 8.  Governing Law.  This Amendment No. 1 shall be
construed in accordance with and governed by the law of the State
of New York (without giving effect to its choice of law
principles).
     
     
     
     IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to the Credit Agreement to be executed and
delivered by their duly authorized officers as of the day first
written above.
                              
                              
                              LECHTERS, INC.
                              
                              
                              
                              By:/s/ John W. Smolak
                                Name:  John W. Smolak
                                Title: Senior Vice President &
				       Chief Financial Officer
                              
                              
                              
                              BANK OF MONTREAL,
                                 as Agent and as a Bank
                              
                              
                              
                              By:/s/ Dennis W. Rourke
                                Name:  Dennis W. Rourke
                                Title: Director
                              
                              
                              
                              THE CHASE MANHATTAN BANK
				(formerly known as 
				CHEMICAL BANK NEW JERSEY, N.A.),
				as a Bank
                              
                              
                              
                              By:/s/ Andrea Johnson
                                Name:  Andrea Johnson
                                Title: Vice President