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                                                                   Exhibit 10.68

                                                                Loan No. 3212525


                               GUARANTY AGREEMENT


         THIS GUARANTY AGREEMENT ("GUARANTY"), is entered into effective as of
March 1, 1999, by DM MANAGEMENT COMPANY, a Delaware corporation with a mailing
address at 25 Recreation Park Drive, Hingham, Massachusetts 02043,
("GUARANTOR"), in favor of JOHN HANCOCK REAL ESTATE FINANCE, INC., a Delaware
corporation ("LENDER"), and the subsequent owners and holders of the herein
below defined Note.

                                    RECITALS:

         A. Birch Pond Realty Corporation, a Delaware corporation ("BORROWER")
has requested a loan (the "LOAN") from Lender in the amount of $12,000,000.00 to
be evidenced by the Mortgage Note of even date herewith executed by Borrower,
payable to Lender in the original principal sum of $12,000,000.00 (the "NOTE"),
and secured by, INTER ALIA, the Mortgage, Assignment of Leases and Rents and
Security Agreement of even date herewith executed by Borrower in favor of Lender
covering certain property in Tilton, Belknap County, New Hampshire (the
"MORTGAGE");

         B. Section 19 of the Note sets forth certain amounts, obligations and
other liabilities for which Borrower is fully liable to Lender (the
"NON-RECOURSE CARVEOUT OBLIGATIONS"), notwithstanding limitations on Borrower's
liability pursuant to said Section 19 of the Note;

         C. Guarantor is the owner of a direct or indirect interest in Borrower,
and Guarantor will directly benefit from Lender's making the Loan to Borrower;
and

         D. As a condition to making the Loan, Lender has required that
Guarantor guarantee the payment of the Non-Recourse Carveout Obligations and
performance of the obligations set forth in Section 1 below (the "GUARANTEED
OBLIGATIONS").

                                   AGREEMENT:

         NOW, THEREFORE, as a material inducement to Lender to agree to make the
Loan to Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby does irrevocably
and unconditionally warrant and represent unto and covenant with Lender as
follows:

         1. GUARANTY. Guarantor hereby (a) guarantees unto Lender the full 
and timely payment of the amounts due, or to become due, to Lender under the 
Non-Recourse Carveout Obligations and (b) agrees with Lender to pay to Lender 
(i) the amounts due under the Non- Recourse Carveout Obligations within five 
(5) business days from the date Lender notifies Guarantor of Borrower's 
failure to pay the same, if and when the same becomes due, and at the place 
specified in the Note for payment and (ii) Lender's reasonable attorneys' 
fees and all court costs incurred by Lender in enforcing or protecting any of 
Lender's rights, remedies or recourses hereunder. Guarantor is not hereby 
guaranteeing payment of any portion of the indebtedness or performance of any 
portion of the obligations under the documents evidencing, securing, 
guaranteeing or executed in connection with the Loan (the "LOAN DOCUMENTS"), 
other than the Non-Recourse Carveout Obligations.

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                                                                Loan No. 3212525


         2. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor hereby
warrants and represents unto Lender as follows:

                  (a) that this Guaranty constitutes the legal, valid and
binding obligation of Guarantor and is fully enforceable against Guarantor in
accordance with its terms, except as may be limited by (i) bankruptcy,
insolvency or other similar laws affecting the rights of creditors generally,
and (ii) general principles of equity;

                  (b) that there are no legal proceedings or material claims or
demands pending against or, to the best of Guarantor's knowledge threatened
against, Guarantor or any of its assets, except as set forth on Exhibit A
attached hereto and made a part hereof;

                  (c) that the execution and delivery of this Guaranty and the
assumption of liability hereunder have been in all respects authorized and
approved by Guarantor and, if applicable, each constituent party or owner of
Guarantor; Guarantor has full authority and power to execute this Guaranty and
to perform its obligations hereunder; and

                  (d) that neither the execution nor the delivery of this
Guaranty nor the fulfillment and compliance with the provisions hereof will
conflict with, result in a breach of, constitute a default under or result in
the creation of any lien, charge, or encumbrance upon any property or assets of
Guarantor under any agreement or instrument to which Guarantor is now a party or
by which it may be bound.

         3. WAIVER. Guarantor hereby waives (a) all notices of acceptance
hereof, protest, demand and dishonor, presentment, notice of nonpayment, notice
of intention to accelerate maturity, notice of acceleration of maturity and all
notices and demands of any kind now or hereafter provided for by any statute or
rule of law other than the five (5) day notice referred to in PARAGRAPH 1 above,
(b) any and all requirements that Lender institute any action or proceeding, or
exhaust or attempt to enforce any or all of Lender's right, remedies or
recourses against Borrower or anyone else or in respect of any mortgaged
property or collateral covered by any Loan Documents, or join Borrower or any
other persons liable on the Non-Recourse Carveout Obligations in any action to
enforce this Guaranty as a condition precedent to bringing an action against
Guarantor upon this Guaranty, it being expressly agreed that the liability of
Guarantor hereunder shall be primary and not secondary, (c) any defense arising
by reason of any disability, insolvency, lack of authority or power, death,
insanity, minority, dissolution or any other defense of Borrower, or any other
surety, co-maker, endorser or guarantor of the Non- Recourse Carveout
Obligations (even though rendering same void, unenforceable or otherwise
uncollectible), it being agreed that Guarantor shall remain liable hereon
regardless of whether Borrower or any other such person be found not liable
thereon for any reason, (d) all suretyship defenses of every kind and nature and
(e) any claim Guarantor might otherwise have against Lender by virtue of
Lender's invocation of any right, remedy or recourse permitted it hereunder or
under the Loan Documents. This is a guaranty of payment and not a guaranty of
collection.

         4. SUBSEQUENT ACTS. Guarantor hereby agrees with Lender that (a) the
payments called for and provisions contained in the Loan Documents, including
specifically (but without limitation) the Note, may be renewed, extended,
rearranged, modified, released or canceled, (b) all or any part of any mortgaged


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                                                                Loan No. 3212525


property and collateral for the indebtedness may be released from, and any new
or additional security may be added to, the lien and security interest of the
Loan Documents, (c) any additional parties who may become personally liable for
repayment of the Note may hereafter be released from their liability hereunder
and thereon and (d) Lender may take, or delay in taking or refuse to take, any
and all action with reference to the Note and the other Loan Documents
(regardless of whether same might vary the risk or alter the rights, remedies or
recourses of Guarantor), including specifically (but without limitation) the
settlement or compromise of any amount allegedly due thereunder, all without
notice or consideration to or the consent of Guarantor, and no such acts shall
in any way release, diminish or affect the absolute nature of Guarantor's
obligations and liabilities hereunder. It is the intent of Guarantor and Lender
that such obligations and liabilities hereunder are primary, absolute and
unconditional under any and all circumstances and that, until the Non-Recourse
Carveout Obligations are fully and finally satisfied, such obligations and
liabilities shall not be discharged or released, in whole or in part, by any act
or occurrence which, but for this PARAGRAPH 4, might be deemed a legal or
equitable discharge or release of Guarantor.

         5. REMEDIES CUMULATIVE. Guarantor hereby agrees with Lender that all
rights, remedies and recourses afforded to Lender by reason of this Guaranty or
otherwise are (a) separate and cumulative and may be pursued separately,
successively or concurrently, as occasion therefor shall arise, and (b)
non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Lender may have.

         6. SUBORDINATION AND NO SUBROGATION. If, for any reason whatsoever,
Borrower now is or hereafter becomes indebted to Guarantor, such indebtedness
and all interest thereon, shall, at all times, be subordinate in all respects to
the Loan Documents, and Guarantor shall not be entitled to enforce or receive
payment thereof until the Non-Recourse Carveout Obligations have been fully
satisfied. Notwithstanding anything to the contrary contained in this Guaranty
or any payments made by Guarantor hereunder, Guarantor shall not have any right
of subrogation in or under the Loan Documents or to participate in any way
therein or in any right, title or interest in and to any mortgaged property or
any collateral for the Loan, all such rights of subrogation and participation,
together with any other contractual, statutory or common law right which
Guarantor may have to be reimbursed for any payments Guarantor may make to
Lender pursuant to this Guaranty, being hereby expressly waived and released.

         7. LAW GOVERNING AND SEVERABILITY. This Guaranty shall be governed by
and construed in accordance with the laws of the State of New Hampshire and is
intended to be performed in accordance with, and only to the extent permitted
by, such laws. If any provision of this Guaranty or the application thereof to
any person or circumstance, for any reason and to any extent, shall be invalid
or unenforceable, neither the remainder of this Guaranty nor the application of
such provision to any other persons or circumstances shall be affected thereby,
but rather the same shall be enforced to the greatest extent permitted by law.

         8. SUCCESSORS AND ASSIGNS. This Guaranty and all the terms, provisions
and conditions hereof shall be binding upon Guarantor and the Guarantor's heirs,
legal representatives, successors and assigns and shall inure to the benefit of
Lender, its successors and assigns and all subsequent holders of the Note.



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                                                                Loan No. 3212525


         9. PARAGRAPH HEADINGS. The paragraph headings inserted in this Guaranty
have been included for convenience only and are not intended, and shall not be
construed, to limit or define in any way the substance of any paragraph
contained herein.

         10. EFFECT OF BANKRUPTCY. This Guaranty shall continue to be effective
or reinstated, as the case may be, if at any time payment to Lender of all or
any part of the Non-Recourse Carveout Obligations is rescinded or must otherwise
be restored or refunded by Lender pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief proceeding involving
Borrower. In the event that Lender must rescind or restore any payment received
by Lender in satisfaction of the Non-Recourse Carveout Obligations, as set forth
herein, any prior release or discharge of the terms of this Guaranty given to
Guarantor by Lender shall be without effect and this Guaranty shall remain in
full force and effect.

         11. NOTICES. All notices hereunder shall be given at the following
address:

         If to Guarantor:           DM Management Company
                                    25 Recreation Park Drive
                                    Hingham, Massachusetts 02043
                                    Attention: Olga Conley

         If to Lender:              John Hancock Real Estate Finance, Inc.
                                    John Hancock Place, T-53
                                    200 Clarendon Street
                                    Boston, Massachusetts 02116
                                    Re: Loan No.  3212525.

         All notices given hereunder shall be in writing and shall be considered
properly given if delivered either personally to such other party, or sent by
nationally recognized overnight courier delivery service or by certified mail of
the United States Postal Service, postage prepaid return receipt requested,
addressed to the other party as set forth above (or to such other address or
person as either party entitled to notice may by notice to the other party
specify). Unless otherwise specified, notices shall be deemed given as follows:
(i) if delivered personally, when delivered, (ii) if delivered by nationally
recognized overnight courier delivery service, on the day following the day such
material is sent or (iii) if delivered by certified mail, on the third day after
the same is deposited in the United States Postal Service as provided above.

         12. BENEFIT. Guarantor warrants and represents that Guarantor has
received, or will receive, direct or indirect benefit from the execution and
delivery of this Guaranty.

         13. NO REPRESENTATIONS BY LENDER. Neither Lender nor anyone acting on
behalf of Lender has made any representation, warranty or statement to Guarantor
to induce Guarantor to execute and deliver this Guaranty.

         14. APPLICATION OF FORECLOSURE PROCEEDS. In the event of any
foreclosure sales of the mortgaged property and collateral covered by the Loan
Documents, the proceeds of such sales shall be applied first to the discharge of
that portion of the indebtedness then remaining unpaid as to which



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                                                                Loan No. 3212525


Guarantor is not fully personally liable pursuant to this Guaranty, it being the
express intention of the parties that the application of the proceeds of such
foreclosure sales shall be in such a manner as not to extinguish or reduce
Guarantor's personal liability hereunder until all of the indebtedness as to
which Guarantor is not personally liable hereunder has been paid in full.
Nothing contained in this PARAGRAPH 14 shall be construed to require that Lender
foreclose the liens and security interests created in the Loan Documents as a
condition precedent to bringing an action against Guarantor upon this Guaranty,
or as an agreement that Guarantor's liability is limited to any deficiency
remaining after such a foreclosure.

         15. JOINT AND SEVERAL LIABILITY. If more than one person is included in
the definition of Guarantor, the liability of all such persons hereunder shall
be joint and several.

         EXECUTED effective as of the date first above written.

Witnessed by:

________________________________              DM MANAGEMENT COMPANY



/s/ Katherine Culkin                          By: /s/ Olga L. Conley
-------------------------------                 --------------------------------
                                                  Name: OLGA L. CONLEY
                                                  Its:  CHIEF FINANCIAL OFFICER




COMMONWEALTH OF MASSACHUESETTS     )
                                   )
COUNTY OF SUFFOLK                  )

         The foregoing instrument was acknowledged before me this 1st day of
March, 1999 by OLGA L. CONLEY, CHIEF FINANCIAL OFFICER of DM Management Company
a Delaware corporation, on behalf of said corporation.


                                                /s/ Katherine Culkin
                                                --------------------------------
                                                Notary Public KATHERINE CULKIN
                                                My Commission Expires: 5/27/05

                                                [SEAL]



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                                                                Loan No. 3212525


                                    EXHIBIT A

                                  LEGAL CLAIMS

From time to time DM Management Company (the "Company") receives claims
asserting infringement by the Company of trademark and other intellectual
property rights. These claims are normally resolved without formal legal
proceedings and without payment by the Company of significant amounts of money.
The following is a summary of a recently received claim:

         The Company received a letter from Williams-Sonoma, Inc. dated December
         2, 1998 alleging certain infringement by the Company of
         Williams-Sonoma's intellectual property rights in its Pottery Barn
         catalogs and certain unethical use by the Company of Williams- Sonoma's
         mailing lists. The Company believes that these claims are without
         merit, and the Company's attorneys have responded on the Company's
         behalf through a letter to Williams-Sonoma's attorneys dated December
         22, 1998. To date the Company and its attorneys have not heard anything
         further from Williams-Sonoma or its attorneys.









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