Exhibit 4.6


                                 THIRD AMENDMENT
                               TO CREDIT AGREEMENT


         This THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of December 30, 1997
(this "Amendment"), amends in certain respects the Second Amended and Restated
Credit Agreement (as heretofore amended, supplemented, or otherwise modified,
the "Credit Agreement") dated as of May 6, 1996 between Loehmann's, Inc. (the
"Borrower"), and BankAmerica Business Credit, Inc., as Agent and sole lender
(the "Lender").

                              W I T N E S S E T H :

         WHEREAS, the Borrower has requested that the Lender amend certain
provisions of the Credit Agreement and the Lender is willing to make such
amendments on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Amendment and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower and
the Lender hereby agree as follows.

         SECTION 1. DEFINED TERMS. Terms defined in the Credit Agreement and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

         SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.

                  (a) The second sentence of Section 2.1(b) is hereby deleted in
its entirety and the following is substituted therefor:

                  "The aggregate Revolving Credit Loan Commitments shall not
                  exceed (A) $45,000,000 from August 15, 1997 through May 31,
                  1998 or (B) $35,000,000 at other times."

                  (b) The amount set forth opposite the Lender's name on the
signature pages of the Credit Agreement under the caption "Commitment" is hereby
deemed amended in its entirety to read as follows:

                  "'Commitment':
                           $45,000,000 from August 15, 1997 through May 31, 
                           1998, and $35,000,0000 at all other times."

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                  (c) The Borrower and the Lender hereby agree that at any time
the aggregate Revolving Credit Loan Commitments in effect exceed $35,000,000,
the Lender may maintain a reserve against Availability of up to $1,000,000.

                  (d) Section 6.1 of the Credit Agreement is hereby amended by
deleting the amount "$21,000,000" set forth opposite the dates January 31 and
April 30, 1998 in the table set forth in such Section and substituting therefor
the amount "$18,000,000".

                  (e) Section 6.2 of the Credit Agreement is hereby amended by
deleting the text appearing opposite the date January 30, 1999 in the table set
forth in such Section and substituting therefor the amount "$9,000,000".

                  (f) Section 6.3 of the Credit Agreement is hereby amended by
deleting the rations set forth opposite the dates January 31, 1998 and April 30,
1998 in the table set forth in such Section and substituting therefor the ratios
"1.4 to 1.0" and "1.3 to 1.0", respectively.

                  (g) Section 6.4 of the Credit Agreement is hereby amended by
deleting the amount set forth opposite the date April 30, 1998 in the table set
forth in such Section and substituting therefor the amount "$19,000,000".

                  (h) Section 8.19 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting therefor the following:

                           "8.19. Limitation on New Store Openings. Open more
                  than three (3) additional stores during the Fiscal Year ending
                  January 30, 1999; provided, however, that the Borrower may
                  open an additional two (2) stores during such Fiscal Year (for
                  a total of five (5) new stores during such Fiscal Year) if the
                  Borrower's EBDAIT for the previous four (4) Fiscal Quarters
                  was at least $28,000,000."

         SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective as of the date first above written when the Agent shall have received
the following:

                  (a) counterparts of this Amendment executed by the Borrower
and the Lender, and

                  (b) payment by the Borrower to the Lender of an amendment fee
in the amount of $50,000, which fee shall be deemed fully earned when paid;

         SECTION 4. COVENANTS. As soon as available, but not later than January
23, 1998, the Borrower shall deliver to the Lender the following:

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                  (a) a certification from a Responsible Officer of the Borrower
that the provisions of this Amendment do not contravene the provisions of any
other agreement to which the Borrower is a party or would constitute a default
under any such agreement; and

                  (b) such other certificates, representations, instruments and
other documents as the Lender may require (including, without limitation, a
certified copy of the resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery of this Amendment, and the performance of
the Credit Agreement as amended hereby), in form and substance satisfactory to
the Lender.

         The failure by the Borrower to deliver the items referred to in the
foregoing paragraphs (a) and (b) within the time period specified shall
constitute an Event of Default.

         SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Lender and the Agent that (i) the execution,
delivery and performance of this Amendment by the Borrower are within its
corporate powers and have been duly authorized by all necessary corporate
action, (ii) no consent, approval, authorization of, or declaration or filing
with, any Public Authority, and no consent of any other Person, is required in
connection with the execution, delivery and performance of this Amendment,
except for those already duly obtained, (iii) this Amendment has been duly
executed by the Borrower and constitutes the legal, valid and binding obligation
of the Borrower, enforceable against it in accordance with its terms and (iv)
the execution, delivery and performance by the Borrower of this Amendment do not
and will not conflict with, or constitute a violation or breach of, or
constitute a default under, or result in the creation or imposition of any Lien
upon the property of the Borrower or any of its Subsidiaries by reason of the
terms of (a) any contract, mortgage, Lien, lease, agreement, indenture, or
instrument to which the Borrower or any of its Subsidiaries is a party or which
is binding upon it, (b) any Requirement of Law applicable to the Borrower or any
of its Subsidiaries, or (c) the Certificate or Articles of Incorporation or
By-Laws of the Borrower or any of its Subsidiaries.

         SECTION 6. REFERENCE TO AND EFFECT ON LOAN DOCUMENTS.

                  (a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement" "hereunder" "hereof" "herein" or words of like
import, and each reference in the other Loan Documents to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as amended hereby.

                  (b) Except as specifically amended above, all of the terms of
the Credit Agreement shall remain unchanged and in full force and effect.

                  (c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Lender or the Agent under

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the Credit Agreement or any of the other Loan Documents, nor constitute a waiver
of any provision of the Credit Agreement or any of the other Loan Documents.

         SECTION 7. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.

         SECTION 8. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of New
York.

         SECTION 9. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.

         IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first above written.


                                             LOEHMANN'S INC.


                                             By: /s/ Robert Glass
                                             --------------------
                                             Title: Senior Vice President/
                                                    Chief Financial Officer


                                             BANKAMERICA BUSINESS CREDIT INC.,
                                              as Lender and Agent


                                             By: /s/ Louis Alexander
                                             -----------------------
                                             Title: Vice President