<PAGE>   1
                                                                    EXHIBIT 10.8



                             RICHEMONT FINANCE S.A.
                           35 Boulevard Prince Henri
                                L1724 Luxembourg


                                        As of March 24, 2000

Congress Financial Corporation,
1133 Avenue of the Americas
New York, New York  10036

          Re: Unsecured Line of Credit in the Maximum Amount of $10,000,000

Ladies and Gentlemen:

          Congress Financial Corporation ("Lender") has entered into financing
arrangements with Hanover Direct Pennsylvania, Inc., Brawn of California, Inc.,
Gump's By Mail, Inc., Gump's Corp., LWI Holdings, Inc., Hanover Direct Virginia
Inc., Hanover Realty, Inc., Tweeds, LLC, Silhouettes, LLC, Hanover Company
Store, LLC, Domestications, LLC, The Company Store Factory, Inc., The Company
Office, Inc. and Keystone Internet Services, Inc. (each individually, a
"Borrower" and collectively, "Borrowers") pursuant to which Lender may make
loans and provide other financial accommodations to Borrowers in accordance
with the terms and conditions of the Loan and Security Agreement, dated
November 14, 1995, by and among Lender, Borrowers and Hanover Direct, Inc.
("Hanover") and certain of Hanover's other subsidiaries (collectively, together
with Hanover, "Guarantors"), as amended through the Fifteenth Amendment to Loan
and Security Agreement (the "Fifteenth Agreement to Loan Agreement"), dated as
of the date hereof (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the "Loan
Agreement"), and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this letter agreement (all of
the foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements").
All capitalized terms used herein. unless otherwise defined herein, shall have
the meanings given to such terms in the Loan Agreement.

         In order to induce Lender to enter into the Fifteenth Amendment to
Loan Agreement and the other Financing Agreements related thereto and in
consideration of the Loans and Letter of Credit Accommodations to be provided
by Lender to Borrowers pursuant thereto, the parties hereto agree as follows:

         1.      Excess Availability Covenant Payments.

                 (a)  If at any time Excess Loan Availability, as determined by
Lender, is less than $3,000,000 under the Loan Agreement, upon receipt of
notice from Lender as provided in
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Section 1(b) hereof, Richemont hereby agrees for the account of Borrowers to pay
Lender in immediately available funds amounts requested by Lender in writing, as
to which the Lender certifies to Richemont as being the amount necessary to
repay the Obligations in an amount sufficient in Lender's discretion so that
Excess Loan Availability shall, after application of such payments, be
$3,000,000; provided, that, Richemont shall not be required to make any such
payments that would result in the total outstanding amount of principal under
the Richemont $10,000,000 Credit Agreements to exceed the maximum credit
availability then in effect as set forth in the Richemont $10,000,000 Credit
Agreements and the Richemont $10,000,000 Subordination Agreement.  Lender agrees
upon the written request of Borrowers to provide, at Borrower's sole cost and
expense, a copy to Borrowers of each notice so provided to Richemont, but the
failure of the Lender to so provide such copy to Borrowers shall not relieve
Richemont of its obligations to make payments to Lender hereunder.

                 (b) All amounts payable by Richemont to Lender hereunder shall
be paid within one (1) Banking Day after Lender gives telephonic notice (during
business hours, Luxembourg time) and sends written notice via telecopier to
Richemont.  Such amounts shall be sent by wire transfer, in immediately
available funds only to the following account, or such other account as Lender
may direct in writing from time to time (the "Payment Account") :

                              Chase Manhattan Bank, N.A.
                              4 New York Plaza
                              New York, New York,
                              ABA No. 021-000-021

                              For credit to Congress Financial Corporation
                              Account No. 322-001-293
                              Re: Subsidiaries of Hanover Direct, Inc.

For purposes of this letter agreement, the term "Banking Day" shall mean any
day, other than Saturday or Sunday, when Lender and commercial banks are open
in New York, New York and Europe.

                 (c)  All such loans and any other obligations, liabilities and
indebtedness of any Borrowers or Guarantors to Richemont under the Richemont
$10,000,000 Credit Agreements shall be subordinated to the right of payment of
Lender to receive the prior indefeasible payment in full of all Obligations in
accordance with the Subordination Agreement, dated as of the date hereof,
between Lender and Richemont (the "Richemont $10,000,000 Subordination
Agreement").

                 (d)  All payments by Richemont hereunder shall be made
directly by Richemont to the Payment Account on behalf of Borrowers for the
benefit of Lender and shall be applied by Lender to the Obligations in
accordance with the Loan Agreement and the other Financing Agreements.  All
payments by Richemont hereunder shall be reimbursement obligations of Borrowers
to Richemont under the Richemont $10,000,000 Credit Agreements subject to the
terms and conditions


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<PAGE>   3
of the Richemont $10,000,000 Subordination Agreement. The obligations of
Richemont hereunder to make payments are absolute and shall be made to Lender in
accordance with the terms hereof from time to time, including, without
limitation, at any time any Borrower is a debtor or debtor-in-possession in any
case under the U.S. Bankruptcy Code or any similar proceeding under any state
insolvency law.

                 (e) Notwithstanding anything to  the contrary contained in the
Richemont $10,000,000 Credit Agreements, the obligations of Richemont to make
the payments hereunder to Lender shall be continuing from the date hereof
through and including the earlier of (i) the indefeasible payment in full of
all Obligations owed to Lender or termination of the Financing Agreements in
accordance with the terms thereof and (ii) the reduction of the maximum credit
in respect of the Richemont $10,000,000 Credit Agreements to zero ($-0-) solely
by reason of the reductions in such maximum credit availability in connection
with cash equity contributions or with conversions by Richemont to the extent
permitted by the Richemont $10,000,000 Subordination Agreement.

         2.      Subordination; Permitted Payments; Reductions in Credit Limit.

                 (a) The Indebtedness of Borrowers arising in connection with
the subordinated loans by Richemont to Borrowers pursuant to the terms hereof,
and the Richemont $10,000,000 Credit Agreements shall be subject to, and
subordinate in right of payment to, the final payment and satisfaction in full
of all of the Obligations as set forth in the Richemont $10,000,000
Subordination Agreement.  Borrowers may make payments in respect of such
Indebtedness to the extent provided in the Richemont $10,000,000 Subordination
Agreement.

                 (b) The maximum credit availability under the Richemont
$10,000,000 Credit Agreements may be permanently reduced in the amount equal to
the net cash proceeds solely by reason of cash equity contributions or
purchases and the amount of conversions by Richemont to the extent provided in
the Richemont $10,000,000 Subordination Agreement.

                 (c) In the event that principal amounts outstanding under the
Richemont $10,000,000 Credit Agreements are repaid by Borrowers to Richemont as
permitted by Section 2.2(a) of the Richemont $10,000,000 Subordination
Agreement, then the amount of the loans available for request by Lender
hereunder shall be reinstated and be available to be paid to Lender in
accordance with terms and conditions hereof, but subject to the then credit
availability under the Richemont $10,000,000 Credit Agreements.

                 (d) In addition to all payments required to be made pursuant
hereto, Borrowers hereby irrevocably authorize and direct that all amounts
otherwise made available under the Richemont $10,000,000 Credit Agreements be
remitted by Richemont directly to the Payment Account for application to the
Obligations by Lender arising in connection with the Loan Agreement and the
other Financing Agreements.




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         3.      Subrogation.  Richemont hereby irrevocably and unconditionally
waives all statutory, contractual, common law, equitable and other claims
against Borrowers, or any of the Collateral for subrogation, reimbursement,
exoneration, contribution, indemnification or other recourse in respect of sums
paid or payable to Lender by Richemont hereunder until all of the Obligations
are paid and satisfied in full.  When all Obligations shall have been
indefeasibly paid in full and discharged and all the Financing Agreements have
been terminated, Richemont shall, to the extent permitted by law, be subrogated
to the rights of Lender to receive payments in respect of the obligations under
the Richemont $10,000,000 Credit Agreements.

         4.      Waivers and Consents.  Notice of acceptance hereof, the making
of Loans and providing Letter of Credit Accommodations to, and the incurring of
any expenses by or in respect of, Borrowers and Richemont by Lender, and all
other notices to which Richemont and Borrowers are or may be entitled are hereby
waived (other than notices to be provided to Richemont by Lender under Sections
1 and 11 hereof).  Richemont waives notice of, and hereby consents to (a)
subject to the provision of the Richemont $10,000,000 Subordination Agreement,
any amendment, modification, supplement, renewal, restatement or extensions of
time of payment of or increase or decrease in the amount of any of the
Obligations or to the Loan Agreement or any of the other Financing Agreements or
any Collateral, (b) the taking, exchange, surrender and releasing of Collateral
or guarantees now or at any time held by or available to Lender for the
Obligations or any other person at any time liable for or in respect of the
Obligations, (c) the exercise of, or refraining from the exercise of any rights
against Borrowers, Richemont or any other obligor or any Collateral, (d) the
settlement, compromise or release of, or the waiver of any default with respect
to, any of the Lender, and/or (e) any Obligations incurred, or grant of a
security interest to secure Obligations, under Section 364 of the U.S.
Bankruptcy Code to Borrowers, as debtor-in-possession.  Any of the foregoing
shall not, in any manner, affect the terms hereof or impair the obligations of
Richemont hereunder.  All of the Obligations shall be deemed to have been made
or incurred in reliance upon this letter agreement.

         5.      Insolvency.  This letter agreement shall be applicable both
before and after the filing of any petition by or against any Borrower under the
U.S. Bankruptcy Code and all converted or succeeding cases in respect thereof,
and all references herein to any Borrower shall be deemed to apply to a trustee
for any Borrower and any Borrower as a debtor-in-possession.  The rights of
Lender and the obligations of Richemont hereunder shall continue after any
filing in respect of any such proceeding on the same basis as before the date of
the petition of such proceeding.

         6.      Account Stated.  The books and records of Lender showing the
account between Lender and Borrowers shall be admissible in evidence in any
action or proceeding against or involving Richemont as prima facie proof of the
items therein set forth, and the monthly statements of Lender rendered to
Borrowers, to the extent to which no written objection is made within thirty
(30) days from the date of sending thereof to Borrowers, shall be deemed
conclusively correct, absent manifest error, and constitute an account stated
between Lender and Borrowers and be binding on Richemont.




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         7.      Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.

                 (a)      The validity, interpretation and enforcement of this
letter agreement and any dispute arising out of the relationship between
Richemont and Lender, whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the State of New York (without giving effect to
principles of conflicts of laws).

                 (b)      The parties hereto hereby irrevocably consent and
submit to the non-exclusive jurisdiction of the Supreme Court of the State of
New York for New York County and the United States District Court for the
Southern District of New York and waive any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under this
letter agreement or any of the other Financing Agreements or in any way
connected with or related or incidental to the dealings of Richemont, Borrowers
and Lender in respect of this letter agreement or any of the other Financing
Agreements or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising and whether in contract, tort, equity or
otherwise, and agrees that any dispute arising out of the relationship between
Richemont or Borrowers and Lender or the conduct of any such persons in
connection with this letter agreement, the other Financing Agreements or
otherwise shall be heard only in the courts described above (except that Lender
shall have the right to bring any action or proceeding against Richemont or its
property in the courts of any other jurisdiction which Lender deems necessary or
appropriate in order to realize on any collateral at any time granted by
Borrowers or Richemont to Lender or to otherwise enforce its rights against
Richemont or its property).

                 (c)      Richemont  hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Lender's option, by service upon Richemont in any other manner provided under
the rules of any such courts.  Within thirty (30) days after such service,
Richemont shall appear in answer to such process, failing which Richemont shall
be deemed in default and judgment may be entered by Lender against Richemont for
the amount of the claim and other relief requested.

                 (d)      EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
LETTER AGREEMENT  OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF RICHEMONT, BORROWERS
AND LENDER IN RESPECT OF THIS LETTER AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE.  EACH OF THE PARTIES HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT RICHEMONT




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<PAGE>   6
OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

                 (e)      Lender shall not have any liability to Richemont
(whether in tort, contract, equity or otherwise) for losses suffered by
Richemont in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this letter agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Lender that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct.  In any such litigation, Lender shall be entitled to the
benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of the Loan
Agreement and the other Financing Agreements.

         8.      Notices.  All notices, requests and demands hereunder shall be
in writing and (a) made to Lender and to Richemont at their respective addresses
set forth on Schedule A hereto as either party may designate by written notice
to the other in accordance with this provision, and (b) deemed to have been
given or made: if delivered in person, immediately upon delivery; if by telex,
telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, two (2) Banking Days after
sending; and if by certified mail, return receipt requested, seven (7) Banking
Days after mailing.


         9.      Partial Invalidity.  If any provision of this letter agreement
is held to be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate this letter agreement as a whole, but this letter agreement
shall be construed as though it did not contain the particular provision held to
be invalid or unenforceable and the rights and obligations of the parties shall
be construed and enforced only to such extent as shall be permitted by
applicable law.

         10.     Entire Agreement.  This letter agreement  represents the entire
agreement and understanding of this parties concerning the subject matter
hereof, and supersedes all other prior agreements, understandings, negotiations
and discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.

         11.     Successors and Assigns.  This letter agreement may not be
assigned by Richemont without the prior written consent of Lender, which consent
Lender shall not unreasonably withhold in its good faith judgment, and shall be
binding upon Richemont and its successors and assigns and shall inure to the
benefit of Lender and its successors, endorsees, transferees and assigns.
Lender may only transfer and assign its rights hereunder in connection with an
assignment of its interests under, and in accordance with, the Loan Agreement so
long as in the event of the transfer or assignment of such interests to more
than one person, all of such transferees and assignees shall have appointed a
single agent to be responsible for the administration of the arrangement of such
transferees or assignees with Richemont hereunder. Nothing contained herein
shall be construed to limit or affect the right of Lender to sell any
participations in the financing arrangements of Lender with Borrowers.  In the
event of any such assignment, the Lender shall provide to Richemont a copy of
the assignment agreement, together




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<PAGE>   7
with evidence of the duly authorized signatories of such assignee who are
authorized to provide the notices to be given to Richemont under Section 1
hereof.  The liquidation, dissolution or termination of Richemont shall not
terminate this letter agreement as to such entity or as to Richemont.

         12.     Construction.  All references to the term "Richemont" wherever
used herein shall mean Richemont and its successors and assigns (including,
without limitation, any receiver, trustee or custodian for Richemont or any of
its assets or Richemont  in its capacity as debtor or debtor-in-possession under
the United States Bankruptcy Code).  All references to the term "Lender"
wherever used herein shall mean Lender and its successors and assigns and all
references to the term "Borrowers" wherever used herein shall mean Borrowers and
their respective successors and assigns (including, without limitation, any
receiver, trustee or custodian for any Borrower or any of its assets or any
Borrower in its capacity as debtor or debtor-in-possession under the United
States Bankruptcy Code).  All references to the term "Person" or "person"
wherever used herein shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof.  All references to the plural shall also mean the singular
and to the singular shall also mean the plural.




                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





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         13.     Counterparts.  This letter agreement may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one and the same agreement.  Making proof of this agreement shall not be
necessary to produce or to account for more than one counterpart thereof signed
by each of the parties hereto.


                                            Very truly yours,

                                            RICHEMONT FINANCE, S.A.

                                            By: /s/ Jan P. du Plessis
                                               -------------------------------

                                            Title: Director
                                                  ----------------------------

                                            By: /s/ Alan Grieve
                                               -------------------------------

                                            Title: Director
                                                  ----------------------------


AGREED:

CONGRESS FINANCIAL CORPORATION

By: /s/ Janet Last
   ---------------------------

Title: Vice President
       -----------------------

ACKNOWLEDGED AND AGREED

HANOVER DIRECT PENNSYLVANIA, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------


BRAWN OF CALIFORNIA, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------


GUMP'S BY MAIL, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: PRES
       -----------------------


                       [SIGNATURES CONTINUE ON NEXT PAGE]





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                   [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

GUMP'S CORP.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

LWI HOLDINGS, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

HANOVER DIRECT VIRGINIA INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: PRES
       -----------------------

TWEEDS, LLC



By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

SILHOUETTES, LLC



By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

HANOVER COMPANY STORE, LLC

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

DOMESTICATIONS, LLC

By: /s/ Brian C. Harriss
   ---------------------------

Title: PRES
       -----------------------



                       [SIGNATURES CONTINUE ON NEXT PAGE]




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                   [SIGNATURES CONTINUED FROM PREVIOUS PAGE]


HANOVER REALTY, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: PRES
       -----------------------

THE COMPANY STORE FACTORY, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

THE COMPANY OFFICE, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: VP
       -----------------------

KEYSTONE INTERNET SERVICES, INC.

By: /s/ Brian C. Harriss
   ---------------------------

Title: PRES
       -----------------------





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                                   SCHEDULE A
                                       TO
                      RICHEMONT $10,000,000 CALL AGREEMENT





To Lender:                       Congress Financial Corporation
                                 1133 Avenue of the Americas
                                 New York, New York 10036
                                 Attention:  Mr. Laurence S. Forte
                                 Telecopier: 212-545-4283
                                 Telephone: 212-545-4280


To Richemont:                    Richemont Finance S.A.
                                 35 Boulevard Prince Henri
                                 L 1724 Luxembourg
                                 Attention:  General Manager
                                 Telecopier: 011-352-22-4219
                                 Telephone: 011-352-22-4210



         with copies to:         Richemont Finance S.A.
                                 Rigistrasse 2
                                 Zug 6300
                                 Switzerland
                                 Attention:  Mr. J. Alan Grieve
                                 Fax: 011-4141-711-7138
                                 Phone: 011-4141-710-3322

                                          and

                                 Robert P. Wessely, Esq.
                                 Dorsey & Whitney
                                 250 Park Avenue
                                 New York, New York 10036
                                 Telecopier: 212-953-7201
                                 Telephone: 212-415-9200





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