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Exhibit 10.32

               Second Amendment dated June 1, 1996 to the
               Fifth Amended and Restated Credit Agreement.


     SECOND AMENDMENT, dated as of June 1, 1996 (the "Amendment"),
to the Fifth Amended and Restated Credit Agreement dated July 31,
1994 (the "Credit Agreement"; terms not otherwise defined herein
shall be used herein as therein defined), among APPAREL AMERICA,
INC., a Delaware corporation (the "Borrower"); CONNECTICUT
DEVELOPMENT AUTHORITY ("CDA") an assignee of Chemical Bank,
BINGHAMTON SAVINGS BANK ("BINGHAMTON") an assignee of Chemical
Bank, and  A.I. ASSOCIATES, INC. ("AI") ( each a "Bank" and
collectively the "Banks"); and BINGHAMTON SAVINGS BANK as agent for
the Banks (and as successor agent to Chemical Bank) (in such
capacity, the "Agent").

                      W I T N E S S E T H :

     WHEREAS, the Borrower has requested that the Credit Agreement
be amended to reflect changes in certain covenants made by
Borrower;

     WHEREAS, the Borrower, the Agent and the Banks have agreed to
so amend the Credit Agreement on the terms set forth below;

     NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:

     1. AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT.
          Section 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definition in the proper alphabetical
order:

        "AGREEMENT" means the Fifth Amended and Restated Credit
Agreement dated July 31, 1994, as amended by the Amendment dated
January 12, 1996 and Second Amendment dated June 1, 1996.

     2. AMENDMENTS TO SECTION 2.2 OF THE CREDIT AGREEMENT.
        Section 2.2 (b) (i) is amended to substitute the amount
"$85,920" in place of the amount "$257,760" appearing after the
date June 30, 1996 and to substitute the amount "$494,081" in place
of the amount "$322,241" appearing after the date June 30, 2000.
                 
        Subsection 2.2 (b) (ii) is amended to substitute the amount
"$66,380" in place of the amount "$199,138" appearing after the
date June 30, 1996 and to substitute the amount "$582,758" in place
of the amount "$450,000" appearing after the date June 30, 2001.

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        Subsection 2.2 (b) (iii) is amended to substitute the
amount "$110,688" in place of the amount "$332,068" appearing after
the date June 30, 1996 and to substitute the amount "$521,380" in
place of the amount "$300,000" appearing after the date June 30,
2000.

        Section 2.2 shall be further amended by inserting at the
end thereof a new Subsection (e), such Subsection (e) to read in
its entirety as follows: "(e) In the event the number of persons
employed by the Borrower in the State of Connecticut at December
31, 1996, and at each December 31 thereafter until maturity of the
CDA Term Loan, shall be less than 400 persons, the Borrower shall
pay to the CDA the sum $171,840, which amount shall be deducted
from the amount of $494,081, payable on June 30, 2000.  Said
$171,840, together with a penalty of $17,184, for a total of
$189,024 shall be payable thirty (30) days after requested by the
CDA, invoking in writing the provisions of this Subsection 2.2 (e)".

     3.  AMENDMENT TO SECTION 8.2 OF THE CREDIT AGREEMENT.
         Subsection 8.2 (k) of the Credit Agreement is hereby
amended by adding at the end thereof the following "PROVIDED,
HOWEVER, that in any event the capital expenditures may be up to
$700,000 for the fiscal year ending July 31, 1996."

     4. AMENDMENT TO SECTION 8.2 OF THE CREDIT AGREEMENT.
         Subsection 8.2 (p) is hereby amended by inserting at the
end thereof the phrase "PROVIDED, HOWEVER, the Borrower may create
a subsidiary, foreign or domestic, to own and operate a sewing
facility in Mexico, PROVIDED, HOWEVER, that such subsidiary shall,
upon organization, guarantee unconditionally the Term Loans".

         5. BORROWER'S CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS. The Borrower, by signing below, represents that it
has the power and authority, and the legal right, to make, deliver
and perform all terms and obligations set forth in this Amendment
and that the Borrower has taken all necessary corporate action to
authorize the terms and obligations set forth in this Amendment.
No consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other person in
required in connection with the execution, delivery, performance,
validity or enforceability of this Amendment. This Amendment has
been duly executed and delivered on behalf of the Borrower. This
Amendment constitutes a legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings
in equity or at law).

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     6.    AFFIRMATIVE ACTION PLAN. The Borrower covenants that it
shall provide the CDA with an updated Affirmative Action Plan
acceptable to the CDA.

    7.     EXPENSES. All expenses of CDA counsel incurred as a
result of this Second Amendment shall be the responsibility of the
Borrower.

    8.     SCOPE.  This Amendment is to be narrowly construed.
Except as  expressly amended herein, all of the covenants and
provision of the Credit Agreement are and shall continue to be in
full force and effect.

    9.     COUNTERPARTS.  This Amendment may be simultaneously
executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.

    IN WITNESS WHEREOF,   the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers as
of the day and year first above written.

Address:                              APPAREL AMERICA, INC.
1175 State Street
New Haven, Connecticut
   06501                              By: /s/ Frederick M. D'Amato    
Telecopy No.:                           ----------------------------
(203) 772-2512                        Name: Frederick M. D'Amato    
Attn: Burton I. Koffman               Title: Vice President-Finance 
      President

with a copy to:
Shustak & Jalil Sanders & Heller
545 Madison Avenue
New York, New York 10022
Telecopy No.: (212) 688-6151
Attn: James P. Jalil, Esq.

Address:                              BINGHAMTON SAVINGS BANK, AS
58-68 Exchange Street                   AGENT AND BANK 
Binghamton, NY 13902
Telecopy No.: (607) 772-6287             
Attn: Glenn Small                     By: /s/ John B. Westcott
                                         ---------------------------
                                       Name: John B. Westcott
                                       Title: Vice President 

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with a copy to:
Howard Rittberg, Esq.
Levene, Gouldin & Thompson
450 Plaza Drive
Vestal, NY 13850

Address:                              A.I. ASSOCIATES, INC., AS BANK
300 Plaza Drive                                           
Vestal, New York 13850                                    
Telecopy No.:                         By: /s/ Milton Koffman
   (607) 797-7103                        ----------------------------
Attn: Milton Koffman                  Name: Milton Koffman  
      President                       Title: President      

Address:                              CONNECTICUT DEVELOPMENT
845 Brook Street                        AUTHORITY, AS BANK
Rocky Hill, CT 06067
Telecopy No.:
   (203) 257-8331                     By: 
Attn: Loan Administration               -----------------------------
                                      Name: Richard P. Graff
                                      Title: Vice President 

with a copy to:     
William G. Rock, Esq.
Shipman & Goodwin
One American Row
Hartford, CT 06103



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with a copy to:
Howard Rittberg, Esq.
Levene, Gouldin & Thompson
450 Plaza Drive
Vestal, NY 13850

Address:                                A.I. ASSOCIATES, INC., AS BANK
300 Plaza Drive
Vestal, New York 13850
Telecopy No.:                           By: 
(607) 797-7103                              -------------------------
Attn: Milton Koffman                        Name: Milton Koffman 
      President                             Title: President     


Address:                                 CONNECTICUT DEVELOPMENT
845 Brook Street                           AUTHORITY, AS BANK
Rocky Hill, CT 06067                    
 Telecopy No.:               
    (203) 257-8331                      By: /s/ Richard P. Graff
 Attn: Loan Administration                 -----------------------
                                        Name:  Richard P. Graff
                                        Title: Vice President 

with a copy to:    
William G. Rock, Esq.
Shipman & Goodwin
One American Row
Hartford, CT 06103