EXHIBIT 10(b)


                                                       July 8, 2004



PERSONAL AND CONFIDENTIAL

Mr. Steve Woodward
73 DeSilva Island Drive
Mill Valley, CA 94941

Dear Steve,

      It  is  a pleasure to confirm our discussion offering you the position of
Senior Vice President  of  Merchandising of The Bombay Company, Inc. ("Company"
or "Bombay"), effective on or  about August 4, 2004 (the "Hire Date").  In this
capacity you will report directly to me.  Merchandising, Planning & Allocation,
Visual Merchandising and Sourcing  will  report directly to you.  You will also
participate as a member of our Executive Committee.

      Your  annualized base salary will be  $300,000.  In  addition,  you  will
participate in  the  Company's  Executive  Bonus Program under which, if Bombay
(USA and Canada) achieves its profit plan for fiscal 2004, you will be eligible
to receive a prorated bonus.  Your targeted  fiscal year bonus is $150,000 (50%
of base salary). 75% of your targeted bonus will  be  based  on  Company profit
results  and 25% of your target bonus will be based on accomplishment  of  your
personal objectives  (MBO's).  Bonuses are paid in a lump sum following the end
of each fiscal year. For  fiscal  2004,  you will receive a guaranteed bonus of
$18,750.

      You  will  receive  an  initial grant of  options  covering  seventy-five
thousand (75,000) shares of Bombay  stock,  which will be priced at the closing
price of Bombay stock on your Hire Date.  These  options  shall vest and may be
exercised in whole or in part at the rate of 33.33% per year,  commencing  with
the  first anniversary of your Hire Date.  The options have a term of ten years
from the  date  of  grant.  Additional grants for you will be considered by the
Board at the beginning of fiscal 2005.

      You will also receive  an  initial  grant  of  twenty-seven thousand five
hundred (27,500) shares of restricted stock under the  Company's 1996 Long-Term
Incentive Stock Plan.   These shares shall vest and be delivered  according  to
the  following  schedule:   five  thousand five hundred (5,500) shares upon the
first  anniversary of the Hire Date  of  this  Agreement,  eight  thousand  two
hundred  fifty  (8,250)  upon  the  second anniversary of the Hire Date of this
agreement and thirteen thousand seven  hundred  fifty  (13,750)  upon the third
anniversary of the Hire Date of this agreement.  You must be actively  employed
at  the end of each respective anniversary period in order to become vested  in
these shares for such periods.


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Mr. Woodward
July 8, 2004
Page 2

      Your  employment  is  at-will  and  may  be  terminated  by  the Board of
Directors of the Company at any time, with or without cause.  However,  if  you
are  terminated,  not  for cause, and subject to your compliance with all terms
and conditions of this letter,  you  are  eligible for up to twelve (12) months
continuation of base salary. Any severance  payments will stop at end of twelve
months or upon re-employment, whichever occurs  first.   During  the  severance
period,  you  will  be eligible for medical, dental and vision coverage through
COBRA.  The Company will  pay  the  COBRA  premiums during the severance period
provided you maintain your payroll deduction  for  this  coverage  through  the
severance period.

        You  agree  that for a period of one (1) year following separation, you
will not, without the  prior  written  approval of a majority of the members of
the Board of Directors, directly or indirectly  seek,  solicit  or  accept  for
employment  or  retention  as  an  independent  contractor any employees of the
Company.

      You recognize and acknowledge you will have  access  to,  and the Company
shall  provide  you with, confidential proprietary information of the  Company,
including information  regarding  costs, profits, markets, sales, products, key
personnel, pricing policies, operational methods, other business methods, plans
for future developments, and other  information  not  readily  available to the
public,  the  disclosure  of which to third parties would in each case  have  a
material adverse effect on  the  Company's  business operations  ("Confidential
Information").  You will keep secret, during  and after the termination of your
employment,  all  Confidential  Information  and  will   not  use  or  disclose
Confidential Information to anyone outside of the Company  other  than  in  the
course of performance of your duties for the Company, except that (i) you shall
have  no  such  obligation to the extent Confidential Information is or becomes
publicly known other  than  as  a  result  of  your  breach of your obligations
hereunder,  and (ii) you may disclose such matters to the  extent  required  by
applicable  laws,   or  governmental  regulations  or  judicial  or  regulatory
processes.  You will  deliver  promptly  to  the Company on termination of your
employment by the Company, or at any other time  the  Board may so request, all
memoranda, notes, records, reports and other documents (and all copies thereof)
relating  to the Company's business that were obtained while  employed  by,  or
otherwise serving  or  acting  on  behalf of, the Company and that you may then
possess or have under your control.

      With respect to relocation, Bombay  will  pay  all  reasonable  costs  of
packing  and moving your furniture and household effects from your current home
to the Fort  Worth area and Bombay will pay a real estate commission expense of
up to 6% for the sale of your current home. The Company requests that you use a
moving company  with whom it has a corporate contract.  Taxable moving expenses
will be grossed up for federal income taxes.




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Mr. Woodward
July 8, 2004
Page 3


Bombay will provide  you  with  temporary  corporate  housing for up to 90 days
while you are in the process of relocating to Fort Worth.  You will be provided
two round-trip visits from San Francisco to Dallas for  you  and  your wife for
purposes of house hunting.

      In the event of a Change of Control, as defined in Exhibit "A,"  attached
hereto,  your  Restricted  Stock  shall be delivered to you without any further
restriction, and the stock options granted to you shall immediately vest and be
exercisable by you commencing on such  date  of  the  Change  of Control event.
This  Change  of  Control  agreement  does  not  supersede  the above severance
agreement and pertains to Change of Control only.

      You are immediately eligible to participate in The Bombay  Company 401(k)
Savings and Stock Ownership Plan provided your government salary limit for this
year has not been reached.  Under this plan, the Company currently  contributes
100%  of  up to 3% of your compensation and 50% for the next 2% of compensation
(Federal Government  salary  limit  is  $205,000).   For calendar 2004, you are
allowed to contribute a maximum of $13,000 ($16,000 if  aged 50 or over), which
may be invested in the various options available in the plan.

      You are eligible to participate in the Employee Stock Purchase Program at
the next available investment period, January 1, 2005, whereby you may purchase
Bombay stock at a 15% discount from the lower fair market value on the first or
last day of the period.

      You will be immediately eligible to join our Medical,  Dental  and Vision
Plans.  The cost of the plans are shared by the Company and the employee.   The
premiums  are  currently tax exempt under a section of the IRS tax code.  There
is a one-year waiting period for any pre-existing conditions.

      After 90 days  of employment you will receive Company paid life insurance
equal to 1  1/2 times  your  compensation  at  plan  with a maximum of $500,000
coverage.   Also, after 60 days of employment you will  be  covered  under  the
Executive Short Term Disability Income Protection Plan, which pays 100% of your
salary for a maximum of 13 weeks, and the Executive Long Term Income Protection
Plan which pays  60%  of your salary up to $25,000 per month for as long as you
remain totally disabled  up  to  age  65.   If  disability begins after age 62,
payments  would  commence on a sliding scale based  on  your  age  at  time  of
disability.  Your  net  cost  will  be limited to the amount of personal income
taxes you pay on the Company reimbursement of the premium.  .



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Mr. Woodward
July 8, 2004
Page 4




      You will be entitled to four weeks  vacation  per  year,  subject  to the
normal terms of the Company's vacation policy.

      You may remain on the Board of Directors for Illuminations so long as  it
does  not  present a conflict of interest due to competition between Bombay and
Illuminations  of  any  merchandise  products,  merchandise strategy and Bombay
strategic directions.

      You agree and represent that your acceptance of employment with Bombay as
set forth in this letter does not conflict with any prior contract or agreement
of employment to which you are a party.

      I look forward to your joining The Bombay Company.   We  are very pleased
that  you  are considering acceptance of this offer and continued  interest  in
this position and the Company.  Please call me if you have any questions.

      For our  records  and  if  you accept this offer, I would appreciate your
signing  and  returning  one  copy of  this  letter  to  me  at  your  earliest
convenience.

                                           Sincerely yours,


                                           /S/ STEVE FARLEY
                                           Steve Farley
                                           Executive  Vice President, Marketing
                                           & Merchandising


/S/ STEVE C. WOODWARD                      July 8, 2004
Steve C. Woodward                          Date

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                                  EXHIBIT "A"

      A "Change of Control" of the Company, unless otherwise  determined by the
Board,  shall  be  deemed  to  have occurred upon the happening of any  of  the
following events:

      (i)   the acquisition, other  than  from  the Company, by any individual,
            entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
            of the Exchange Act) of beneficial ownership  of  20%  or  more  of
            either  the  then outstanding shares of Common Stock of the Company
            or  the combined  voting  power  of  the  then  outstanding  voting
            securities  of  the  Company  entitled  to  vote  generally  in the
            election  of directors; provided, however, that any acquisition  by
            the Company  or  any  of  its subsidiaries, or any employee benefit
            plan (or related trust) of  the Company or its subsidiaries, or any
            corporation with respect to which  following such acquisition, more
            than 50% of, respectively, the then  outstanding  shares  of common
            stock of such corporation and the combined voting power of the then
            outstanding voting securities of such corporation entitled  to vote
            generally  in the election of directors is then beneficially owned,
            directly  or  indirectly,  by  all  or  substantially  all  of  the
            individuals   and   entities   who   were  the  beneficial  owners,
            respectively,  of the Common Stock and  voting  securities  of  the
            Company immediately  prior to such acquisition in substantially the
            same  proportion as their  ownership,  immediately  prior  to  such
            acquisition,  of the then outstanding shares of Common Stock of the
            Company or the combined voting power of the then outstanding voting
            securities  of the  Company  entitled  to  vote  generally  in  the
            election of directors,  as  the case may be, shall not constitute a
            Change of Control;

      (ii)  individuals who, as of January  1,  2004, constitute the Board (the
            "Incumbent Board") cease for any reason  to  constitute  at least a
            majority  of  the  Board,  provided that any individual becoming  a
            director subsequent to such  date whose election, or nomination for
            election by the Company's shareholders,  was  approved by a vote of
            at least a majority of the directors then comprising  the Incumbent
            Board shall be considered as though such individual were  a  member
            of  the  Incumbent Board, but excluding, for this purpose, any such
            individual whose initial assumption of office is in connection with
            an actual  or  threatened election contest relating to the election
            of the directors  of  the  Company  (as such terms are used in rule
            14a-11 of Regulation 14A promulgated under the Exchange Act); or

      (iii) approval by the shareholders of the Company  of  a  reorganization,
            merger or consolidation of the Company, in each case,  with respect
            to  which  the  individuals  and  entities  who were the respective
            beneficial owners of the Common Stock and voting  securities of the
            Company  immediately  prior  to  such  reorganization,  merger   or
            consolidation  do  not,  following  such  reorganization, merger or
            consolidation, beneficially own, directly or  indirectly, more than
            50% of, respectively, the then outstanding shares  of  Common Stock
            and  the  combined  voting  power  of  the  then outstanding voting
            securities entitled to vote generally in the election of directors,
            as  the  case  may  be,  of  the  corporation resulting  from  such
            reorganization, merger or consolidation,  or a complete liquidation
            or dissolution of the Company or of the sale  or  other disposition
            of all or substantially all of the assets of the Company.
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