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                                                                     Exhibit 4.2

                        SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
                  dated as of December 20, 1996, among LIFESTYLE OUTLET
                  CORPORATION (the "New Guarantor Subsidiary"), a subsidiary of
                  Lifestyle Furnishings International Ltd. (or its successor), a
                  Delaware corporation (the "Company"), THE COMPANY, on behalf
                  of itself and the Guarantor Subsidiaries (the "Existing
                  Guarantor Subsidiaries") under the Indenture referred to
                  below, and IBJ SCHRODER BANK & TRUST COMPANY, a New York
                  banking corporation, as trustee under the indenture referred
                  to below (the "Trustee").


                             W I T N E S S E T H :


            WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (the "Indenture"), dated as of August 5, 1996, providing
for the issuance of an aggregate principal amount of $200,000,000 of 10-7/8%
Senior Subordinated Notes due 2006 (the "Securities");

            WHEREAS Section 4.15 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor Subsidiary to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Guarantor Subsidiary shall unconditionally guarantee all of the
Company's obligations under the Securities pursuant to a Subsidiary Guaranty on
the terms and conditions set forth herein; and

            WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and Existing Guarantor Subsidiaries are authorized to execute and
deliver this Supplemental Indenture;

            NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor Subsidiary, the Company, the Existing Guarantor Subsidiaries and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:

            1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
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                                                                               2

            (b) For all purposes of this Supplement, except as otherwise herein
expressly provided or unless the context otherwise requires: (i) the terms and
expressions used herein shall have the same meanings as corresponding terms and
expressions used in the Indenture; and (ii) the words "herein," "hereof" and
"hereby" and other words of similar import used in this Supplement refer to this
Supplement as a whole and not to any particular section hereof.

            2. Agreement to Guarantee. The New Guarantor Subsidiary hereby
agrees, jointly and severally with all other Guarantor Subsidiaries, to
guarantee the Company's obligations under the Securities on the term and subject
to the conditions set forth in Article XI of the Indenture and to be bound by
all other applicable provisions of the Indenture.

            3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.

            4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            5. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.

            6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

            7. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
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            IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.

                         LIFESTYLE OUTLET CORPORATION,

                           by
                             _______________________________
                             Name:
                             Title:


                         LIFESTYLE FURNISHINGS INTERNATIONAL
                         LTD., on behalf of itself and the Existing Guarantor
                         Subsidiaries,

                           by
                             _______________________________
                             Name:
                             Title:


                         IBJ SCHRODER BANK & TRUST COMPANY,
                         as Trustee,

                           by
                             _______________________________
                             Name:
                             Title: