EXHIBIT 10.40.1      
                                


                                                                 
                                                                 
                                                                 
                    AMENDMENT AGREEMENT NO. 1
                                
                                
      AMENDMENT  AGREEMENT NO. 1 dated as of September  14,  1998
(this  "Amendment") by and among (a) Filene's Basement,  Inc.,  a
Massachusetts corporation (the "Borrower"), (b) Filene's Basement
Corp.,   a  Massachusetts  corporation  (the  "Guarantor"),   (c)
BankBoston,  N.A. (f/k/a The First National Bank of  Boston)  and
the other lending institutions listed on Schedule 1 to the Credit
Agreement  (as hereinafter defined) (collectively, the  "Banks"),
(d)  BankBoston, N.A. (f/k/a The First National Bank of  Boston),
as  agent  for  itself and the Banks (the "Agent"), amending  the
Amended  and  Restated Revolving Credit and Term  Loan  Agreement
dated as of January 30, 1998 (as amended and in effect from  time
to   time,  the  "Credit  Agreement")  among  the  Borrower,  the
Guarantor,  the  Banks  and the Agent.   Capitalized  terms  used
herein  without other definition shall have the meanings assigned
to them in the Credit Agreement.

      WHEREAS,  upon  the  terms and subject  to  the  conditions
contained herein, the Borrower, the Guarantor, the Agent and  the
Majority  Banks wish to amend certain provisions  of  the  Credit
Agreement;

      NOW,  THEREFORE, in consideration of the mutual  agreements
contained  in the Credit Agreement and herein and for other  good
and  valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged  the parties  hereto  hereby  agree  as
follows:

      1.   Amendment  of  Section 1.1 of  the  Credit  Agreement.
Section 1.1 of the Credit Agreement is hereby amended as follows:

           (a)   The  definition of "Consolidated Operating  Cash
     Flow"  set forth in such section is amended and restated  in
     its entirety to read as follows:
     
                Consolidated Operating Cash Flow.  For any period
          an  amount  equal  to  EBITDA for  such  period,  less,
          Capital Expenditures made during such period, excluding
          Capital Expenditures made during the fiscal year ending
          January  30,  1999  up to an aggregate  amount  not  to
          exceed $12,500,000, less, cash payments for all current
          income  taxes  made by the Guarantor, the Borrower  and
          their Subsidiaries during such period.  Notwithstanding
          the foregoing and subject to the other requirements  of
          the  Credit  Agreement, Capital  Expenditures  are  not
          limited to $12,500,000 in any fiscal year.

           (b)  The definition of "Permitted Inventory Locations"
     set  forth in such section is amended by deleting the  words
     "Schedule  2"  and substituting in place thereof  the  words
     "Schedule 8.22".

      2.   Amendment  of Section 9.4(j) of the Credit  Agreement.
Section  9.4(j)  of  the Credit Agreement is  hereby  amended  by
deleting the words "Schedule 2" and substituting in place thereof
the words "Schedule 8.22".

      3.   Amendment  of  Section 11.2 of the  Credit  Agreement.
Section  11.2  of  the  Credit Agreement  is  hereby  amended  by
amending and restating in its entirety the table set forth at the
end of such section to read as follows:

               Period Ending          Ratio
                     
           January 31, 1998         1.40:1.00
           May 2, 1998              1.00:1.00
           August 1, 1998           0.90:1.00
           October 31, 1998         1.00:1.00
           January 30, 1999 and     1.50:1.00
           thereafter

      4.   Amendment Fee.  The Borrower shall pay to  the  Agent,
for  the account of those Banks which have delivered to the Agent
on or prior to the Effective Date facsimile copies of such Bank's
executed signature page to this Amendment, on the Effective  Date
an amendment fee in the amount of $30,000 (the "Amendment Fee")

      5.   Conditions  To  Effectiveness.  This  Amendment  shall
become  effective  as of the date hereof (the  "Effective  Date")
upon  satisfaction  of the following conditions:  (a)  the  Agent
receives  facsimile  copies  of  original  counterparts  (to   be
followed   promptly   by  original  counterparts)   or   original
counterparts  of this Amendment, duly executed  by  each  of  the
Borrower,  the Guarantor, the Agent, and the Majority  Banks  and
(b) the Borrower shall have paid to the Agent the Amendment Fee.

        6.     Representation   and   Warranties;   No   Default;
Authorization.   Each  of the Borrower and the  Guarantor  hereby
represents  and warrants to each of the Agent and  the  Banks  as
follows:

      (a)  Each of the representations and warranties of each  of
the Borrower and the Guarantor contained in the Credit Agreement,
the  other  Loan  Documents  or in  any  document  or  instrument
delivered pursuant to or in connection with the Credit Agreement,
the  other  Loan Documents or this Amendment was true as  of  the
date  as  of which it was made and is true as and at the date  of
this  Amendment, and no Default or Event of Default has  occurred
and is continuing as of the date of this Amendment; and

      (b)  This Amendment has been duly authorized, executed  and
delivered by each of the Borrower and the Guarantor and shall  be
in  full force and effect upon the satisfaction of the conditions
set  forth  in  5  hereof,  and the agreements  of  each  of  the
Borrower and the Guarantor party hereto contained herein, in  the
Credit  Agreement,  as  amended, and  the  other  Loan  Documents
respectively constitute the legal, valid and binding  obligations
of  each  of the Borrower and the Guarantor, enforceable  against
such  Borrower  or Guarantor in accordance with their  respective
terms,   except  as  enforceability  is  limited  by  bankruptcy,
insolvency, reorganization, moratorium or other laws relating  to
or  affecting generally the enforcement of creditors' rights  and
except  to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion  of
the court before which any proceeding therefor may be brought.

      7.   Entire Agreement.  This Amendment, together  with  the
Credit Agreement as amended hereby, and the other Loan Documents,
express  the entire understanding of the parties with respect  to
the transactions contemplated hereby.  Neither this Amendment nor
any  term hereof may be changed, waived, discharged or terminated
except as provided in 27 of the Credit Agreement.

      8.  Ratification, etc.  Except as expressly amended hereby,
the Credit Agreement, the other Loan Documents and all documents,
instruments  and  agreements related thereto are hereby  ratified
and  confirmed in all respects and shall continue in  full  force
and  effect.  All references in the Credit Agreement or the other
Loan  Documents or in any related agreement or instrument to  the
Credit  Agreement  or  the other Loan Documents  shall  hereafter
refer to the Credit Agreement as amended hereby, pursuant to  the
provisions of the Credit Agreement.

      9.   Implied Waiver.  Except as expressly provided  herein,
nothing contained herein shall constitute a waiver of, impair  or
otherwise  affect any Obligations, any other obligations  of  the
Borrower or the Guarantor or any right of the Agent or the  Banks
consequent thereon.

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

      11.  Governing Law.  THIS AMENDMENT SHALL FOR ALL  PURPOSES
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS  OF
LAW).

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      IN  WITNESS WHEREOF, the parties hereto have executed  this
Amendment  as  a document under seal as of the date  first  above
written.
                              
                              
                              
                              FILENE'S BASEMENT, INC.
                              
                              
                              
                              By:  /s/  STEVEN SIEGEL
                                 Title:  Exec. Vice-President & Chief 
                                            Financial Officer
                                            
                                             
                              FILENE'S BASEMENT CORP.
                                           
                                            
                                           
                              By:  /s/  STEVEN SIEGEL 
                                 Title:  Exec. Vice-President & Chief
                                            Financial Officer
                              
                                                            
                              BANKBOSTON, N.A. (f/k/a  The  First
                              National     Bank    of    Boston),
                              Individually and as Agent
                              
                              
                              
                              By:  /s/ PAUL G. FELONEY
                              _________________________________
                                 Paul G. Feloney, Director
                              
                              BANKAMERICA BUSINESS CREDIT, INC.
                              
                              
                              
                              By:  /s/ IRA A. MERMELSTEIN
                              _________________________________
                                 Name: Ira A. Mermelstein
                                 Title: Vice-President
                              
                              
                              
                              HELLER FINANCIAL, INC.
                              
                              
                              
                              By:  /s/  THOMAS BUKOWSKI
                              _________________________________
                                 Name: Thomas Bukowski
                                 Title: Senior Vice-President
                                 
                                
                    RATIFICATION OF GUARANTY

      The  undersigned guarantor hereby acknowledges and consents
to  the  foregoing Amendment as of September __, 1998 and  agrees
that  the  Guaranty  dated as of May 23,  1996  and  amended  and
ratified  as of January 30, 1998, in favor of the Agent  for  the
benefit  of the Agent and the Banks, and all other Loan Documents
to  which  the  Guarantor is a party remain  in  full  force  and
effect,  and  the  Guarantor confirms and  ratifies  all  of  its
obligations thereunder.


                              FILENE'S BASEMENT CORP.



By:_/s/  STEVEN SIEGEL_
                              Title: Exec. Vice-President & Chief
                                        Financial Officer