Exhibit 10.2.4

                      FOURTH AMENDMENT TO CREDIT AGREEMENT

         THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),  dated as
of September 30, 1999, is by and among Cluett American Corp.  (the  "Borrower"),
Cluett American  Investment  Corp. (the "Parent"),  Cluett American Group,  Inc.
("Interco")  and  the  certain  subsidiaries  of the  Parent  identified  on the
signature pages hereto (together with the Parent and Interco, the "Guarantors"),
the lenders  identified on the signature pages hereto (the  "Lenders"),  Bank of
America,  N.A.  (formerly known as NationsBank,  N.A.), as agent for the Lenders
(in such  capacity,  the "Agent") and Gleacher  NatWest Inc.,  as  documentation
agent (the "Documentation Agent").

                               W I T N E S S E T H

         WHEREAS, the Borrower,  the Guarantors,  the Lenders, the Agent and the
Documentation  Agent have entered into that certain Credit Agreement dated as of
May 18,  1998,  as amended as of May 27,  1998,  December 18, 1998 and March 19,
1999 (as so amended the "Existing Credit Agreement"); and

         WHEREAS,  the parties to the Existing  Credit  Agreement have agreed to
amend the Existing Credit Agreement as provided herein.

         NOW,  THEREFORE,  in  consideration  of the agreements  hereinafter set
forth, and for other good and valuable  consideration,  the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:


                                     PART 1
                                   DEFINITIONS

     SUBPART 1.1 Certain  Definitions.  Unless  otherwise  defined herein or the
context  otherwise  requires,  the  following  terms  used  in  this  Amendment,
including its preamble and recitals, have the following meanings:

                  "Amended Credit  Agreement"  means the Existing Credit
                   Agreement as amended hereby.

                  "Amendment No. 4 Effective Date" is defined in Subpart 3.1.

     SUBPART  1.2 Other  Definitions.  Unless  otherwise  defined  herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.

                                     PART 2
                     AMENDMENTS TO EXISTING CREDIT AGREEMENT

     Effective  on (and  subject  to the  occurrence  of) the  Amendment  No.  4
Effective  Date, the Existing  Credit  Agreement is hereby amended in accordance
with this Part 2. Except as so amended,  the Existing  Credit  Agreement and all
other Credit Documents shall continue in full force and effect.

     SUBPART 2.1 Amendments to Section 1.1.

     (a)  The  pricing  grid   contained  in  the   definition  of   "Applicable
          Percentage"  appearing in Section 1.1 of the Existing Credit Agreement
          is hereby amended and restated as follows:
                                       1
<PAGE>
<TABLE>
                                      Applicable Percentage For
                                    Revolving Loans and Tranche    Applicable Percentage For
                                           A Term Loan               Tranche B Term Loan
                                    -------------- ------------   -------------- ----------
<S>        <C>          <C>           <C>          <C>            <C>            <C>            <C>                 <C>
                        Applicable                                                                 Applicable          Applicable
             Senior     Percentage                                                                Percentage For      Percentage for
Pricing     Leverage    For Unused    Eurodollar    Base Rate      Eurodollar     Base Rate     Standby Letter of    Trade Letter of
 Level        Ratio         Fee          Loans       Loans          Loans          Loans          Credit Fee          Credit Fee
---------- ----------- ------------ ------------- -------------- -------------- ------------    -----------------     --------------
  I        > 2.50 to
              1.00          1/2%          3%            2%           3-1/2%        2-1/2%              3%                 1-1/2%

---------- ----------- ------------ ------------- -------------- -------------- ------------    -----------------     --------------
  II        < 2.50 to
            1.00 but >
             2.00 to        1/2%          2-3/4%      1-3/4%         3-1/4%        2-1/4%             2-3/4%              1-3/8%
               1.00
---------- ----------- ------------ ------------- -------------- -------------- ------------    -----------------     --------------
  III       < 2.00 to
            1.00 but >
            1.75 to         3/8%          2-1/2%     1-1/2%            3%            2%               2-1/2%              1-1/4%
             1.00
---------- ----------- ------------ ------------- -------------- -------------- ------------    -----------------     --------------
  IV        < 1.75 to
            1.00            3/8%          2-1/4%     1-1/4%            3%            2%               2-1/4%              1-1/8%
---------- ----------- ------------ ------------- -------------- -------------- ------------    -----------------     --------------

</TABLE>
     (b)  The definition of  "Consolidated  EBITDA"  appearing in Section 1.1 of
          the Existing  Credit  Agreement is hereby  amended and restated in its
          entirety to read as follows:

                  "Consolidated  EBITDA" means,  for any period,  the sum of (i)
         Consolidated Net Income for such period,  plus (ii) an amount which, in
         the determination of Consolidated Net Income for such period,  has been
         deducted for (A)  Consolidated  Interest  Expense,  (B) total  federal,
         state,  local and foreign  income,  value added and similar taxes,  (C)
         depreciation and amortization  expense,  (D) letter of credit fees, (E)
         non-cash  expenses  resulting  from the grant of, or the  obligation to
         grant, stock and stock options to employees of the Parent, the Borrower
         or any of their respective  Subsidiaries  pursuant to a written plan or
         agreement  and (F)  step-ups  in  inventory  valuation  as a result  of
         purchase  accounting for Permitted  Acquisitions,  all as determined in
         accordance with GAAP; provided,  however,  that Consolidated EBITDA for
         any  period  shall  be equal  to the sum of (i) the  amount  determined
         pursuant to the first  clause of this  definition  for such period plus
         (ii) the  aggregate  Consolidated  EBITDA  Adjustment  for each  fiscal
         quarter occurring during such period.

     (c)  The  definition  of  "Consolidated  EBITDA  Adjustment"  appearing  in
          Section 1.1 of the Existing  Credit  Agreement  is hereby  amended and
          restated in its entirety to read as follows:

                  "Consolidated  EBITDA  Adjustment"  means  (i) for the  fiscal
         quarter ending December 31, 1998, the lesser of $2.3 million and actual
         losses  of  Cluett  Designer  Group,   Inc.  for  such  fiscal  quarter
         associated  with the  discontinuance  of the  Burberrys  and Yves Saint
         Laurent licensed  product lines,  (ii) for any fiscal quarter ending on
         or after  December  31,  1998,  the sum of (A) the  amount,  if any, of
         reorganization  charges taken during such fiscal  quarter in respect of
         (1)  up  to  $550,000  of  losses  accrued  by  the  Borrower  and  its
         Subsidiaries  on or prior to December 31, 1998  associated with (x) the
         Canadian retail operations of the Borrower and its Subsidiaries and (y)
         the  Mexican  and  Guatemalan   operations  of  the  Borrower  and  its
         Subsidiaries,  (2) the costs and  expenses of the Parent,  the Borrower
         and its Subsidiaries  incurred in connection with the  Recapitalization
         and (3) up to $700,000 for non-cash facility closing and re-engineering
         costs  accrued  by the  Borrower  and its  Subsidiaries  on or prior to
         December 31, 1998, plus (B) the amount, if any, of charges taken during
         such fiscal quarter in respect of (1) the  establishment on or prior to
         December 31, 1998 of a litigation reserve of up to $1.6 million and (2)
         failed deal costs of up to $500,000  incurred by the  Borrower  and its
         Subsidiaries on or prior to December 31, 1998, and (iii) for any fiscal
         quarter  ending  on or after  September  30,  1999 and not  later  than
         December  31, 2000,  the sum of (A) the amount of charges  taken during
         such quarter in respect of  reorganization  and  restructuring  charges

                                       2
<PAGE>
         (including,  without limitation,  facility closing, severance,  pension
         expense and  re-engineering  costs)  incurred by the Borrower or any of
         its Subsidiaries  during the period from and including June 30, 1999 to
         and including December 31, 2000,  provided that the aggregate amount of
         all such charges for all such periods shall not exceed  $6,000,000  and
         (B) the amount of charges  taken during such fiscal  quarter in respect
         of the  establishment  on or  prior to June  30,  2000 of a  litigation
         reserve of up to $725,000,  in each case  calculated in accordance with
         GAAP.

     (d)  The  definition of "Equity  Issuance"  appearing in Section 1.1 of the
          Existing  Credit  Agreement  is hereby  amended  and  restated  in its
          entirety to read as follows:

                  "Equity Issuance" means any issuance for cash by the Parent or
         any Consolidated Party to any Person which is not a Credit Party of (a)
         any of its Equity Interests,  (b) any of its Equity Interests  pursuant
         to the  exercise  of  options  or  warrants  or (c)  any of its  Equity
         Interests  pursuant to the conversion of any debt securities to equity.
         The term "Equity  Issuance" shall include any Sponsor Equity  Issuance,
         but shall not include any Asset Disposition.

     (e)  The  definition of "Funded  Indebtedness"  appearing in Section 1.1 of
          the Existing  Credit  Agreement is hereby  amended and restated in its
          entirety to read as follows:

                  "Funded  Indebtedness"  means,  with  respect  to any  Person,
         without duplication,  the sum of (i) the amount equal to the sum of (a)
         all  Indebtedness  of such Person other than  Indebtedness of the types
         referred to in clause (e), (f),  (g), (i) and (m) of the  definition of
         "Indebtedness" set forth in this Section 1.1, plus (b) all Indebtedness
         of another  Person of the type  referred to in clause (a) above secured
         by (or for which the holder of such Funded Indebtedness has an existing
         right,  contingent  or  otherwise,  to be  secured  by) any Lien on, or
         payable  out of the  proceeds of  production  from,  Property  owned or
         acquired by such Person, whether or not the obligations secured thereby
         have been  assumed,  plus (c) all Guaranty  Obligations  of such Person
         with  respect to  Indebtedness  of the type  referred  to in clause (a)
         above of another Person plus (d)  Indebtedness  of the type referred to
         in clause (a) above of any partnership or unincorporated  joint venture
         in which such  Person is a general  partner or a joint  venturer to the
         extent  such  Person is liable  therefor,  plus  (ii) the  portion  not
         applied to the prepayment of the Loans pursuant to Section 3.3(b)(v)(B)
         of the  aggregate  Net Cash  Proceeds of all Sponsor  Equity  Issuances
         consummated on or after September 30, 1999 and at a time when the Total
         Leverage Ratio as of the most recent fiscal quarter end with respect to
         which the Agent has  received  the Required  Financial  Information  is
         greater than 6.5 to 1.0.

     (f)  The following new definitions are added to Section 1.1 of the Existing
          Credit Agreement in appropriate alphabetical order:

                  "Investment  and Deposit  Agreement"  means the investment and
         deposit agreement dated as of September 30, 1999 between Vestar Capital
         Partners III,  L.P. and the Agent,  as amended,  modified,  restated or
         supplemented from time to time.

                  "Leverage  Grace  Period"  means,  with  respect to any fiscal
         quarter, the period beginning with the date that the Credit Parties are
         required to deliver the Required Financial  Information for such fiscal
         quarter to the Lenders  (or, if  earlier,  the date that such  Required
         Financial  Information becomes available to the Borrower) and ending on
         the later of (i) the date 15 Business Days thereafter or (ii) if a Sale
         Moratorium  (as  hereinafter  defined)  is in  effect  as of  the  date
         determined  pursuant  to clause  (i)  above,  the last day of such Sale
         Moratorium;  provided, however, that (A) in no event shall the Leverage
         Grace Period for any fiscal  quarter extend beyond the date that is 180
         days after the date that the Credit Parties are required to deliver the
         Required  Financial  Information for such fiscal quarter to the Lenders
         (or,  if earlier,  the date that such  Required  Financial  Information
         becomes  available to the Borrower) and (B) the Credit Parties shall be
         entitled to invoke a Sale  Moratorium  only one time.  For  purposes of
         this definition,  a "Sale Moratorium" shall be in effect for the period
         beginning  with the date that the Agent  receives a written notice from
         the Borrower  requesting an extension of the Leverage Grace Period then
         in effect,  together with satisfactory evidence that the Credit Parties

                                       3
<PAGE>
         have engaged a financial advisor reasonably  acceptable to the Agent to
         arrange a sale of all or substantially all of either the Shirt Group or
         the Sock  Group,  and ending on the  earliest  of (a) the date 180 days
         after the date of engagement of such  financial  advisor,  (b) the date
         (as determined by the Agent in its sole reasonable discretion) on which
         the Credit Parties discontinue their efforts to consummate the sale for
         which such  financial  advisor  was engaged and (c) the date on which a
         sale of all or substantially  all of either the Shirt Group or the Sock
         Group is consummated in accordance with the terms of Section 8.5.

                  "Sale Moratorium" shall have the meaning assigned to such term
         in the definition of "Leverage  Grace Period" set forth in this Section
         1.1.
                  "Shirt  Group" means any of the Equity  Interests and Property
         comprising the businesses of the Borrower and its Subsidiaries that are
         engaged,  domestically or internationally,  in the design,  manufacture
         and marketing of dress shirts and sportswear.

                  "Sock  Group" means any of the Equity  Interests  and Property
         comprising the businesses of the Borrower and its Subsidiaries that are
         engaged,  domestically or internationally,  in the design,  manufacture
         and  marketing  of  branded  and  private  label  men's,   women's  and
         children's socks.

                  "Sponsor  Equity  Issuance"  means any Equity  Issuance to the
         Sponsor or its  Affiliates  or  designated  co-investors  or any of the
         officers, directors or employees of the Parent or a Consolidated Party.

                  "Sponsor   Equity   Issuance   Prepayment   Event"  means  the
         occurrence,   prior  to  termination  of  the  Investment  and  Deposit
         Agreement in accordance  with the terms of Section 9.13  thereof,  of a
         Sponsor  Equity  Issuance  at a time that any  Events of  Default  with
         respect to which a Leverage  Grace  Period  has  become  effective  are
         continuing  (whether or not such  Leverage  Grace Period has  expired),
         other than an issuance of Equity Interests (a) pursuant to the exercise
         of options or  warrants  or (b) the  proceeds  of which are used by the
         Parent to repurchase  Equity Interests of the Parent in accordance with
         the terms of Section 8.7(v).

     SUBPART  2.2  Amendments  to Section  3.3(b).  Subsections  (v) and (vi) of
Section 3.3(b) of the Existing Credit  Agreement are hereby amended and restated
in their entireties to read as follows:

                                                  3.3   Prepayments.

                                                     **********

     (b)  Mandatory Prepayments.
                                                     **********

                         (v)      Issuances of Equity.

                                    (A) Non-Sponsor Equity Issuance. Immediately
                           upon the occurrence of any Equity Issuance other than
                           a Sponsor Equity Issuance,  the Borrower shall prepay
                           the Loans in an aggregate amount equal to 100% of the
                           Net  Cash  Proceeds  of such  Equity  Issuance  (such
                           prepayment  to be applied as set forth in clause (vi)
                           below).

                                    (B)  Sponsor  Equity  Issuance.  Immediately
                           upon the  occurrence  of a  Sponsor  Equity  Issuance
                           Prepayment Event, the Borrower shall prepay the Loans
                           in an  aggregate  amount  equal to the  lesser of (x)
                           100% of the Net Cash Proceeds of the related  Sponsor
                           Equity  Issuance  and  (y)  as  applicable,  (I)  the
                           portion  of the  Net  Cash  Proceeds  of the  related
                           Sponsor Equity  Issuance  necessary to effect a cure,
                           in the manner  contemplated  by Section  7.11(f),  of
                           Events of Default  resulting from  non-compliance  by
                           the  Credit  Parties  with  Section   7.11(c)  and/or
                           Section  7.11(d) as of the end of each fiscal quarter
                           with respect to which a Leverage Grace Period is then

                                       4
<PAGE>
                           in  effect  or  (II)  the  portion  of the  Net  Cash
                           Proceeds  of  the  related  Sponsor  Equity  Issuance
                           necessary  to  effect   compliance,   in  the  manner
                           contemplated  by  Section  8.5(c)(ii)(B),   with  the
                           financial  ratios set forth in Section  8.5(c)(ii)(A)
                           in connection with a sale of all or substantially all
                           of the Shirt Group at any time that a Sale Moratorium
                           is in effect (such  prepayment,  in any such case, to
                           be applied as set forth in clause (vi) below).

                           (vi)  Application  of  Mandatory   Prepayments.   All
                  amounts  required to be paid  pursuant to this Section  3.3(b)
                  shall be applied as follows:  (A) with  respect to all amounts
                  prepaid  pursuant  to Section  3.3(b)(i),  first to  Swingline
                  Loans and then to the Revolving Loans and (after all Revolving
                  Loans  have  been  repaid)  to a cash  collateral  account  in
                  respect of LOC  Obligations,  (B) with  respect to all amounts
                  prepaid pursuant to Section 3.3(b)(ii),  Section 3.3(b)(iv) or
                  Section 3.3(b)(v)(A),  pro rata to the Tranche A Term Loan and
                  the Tranche B Term Loan (in each case ratably to the remaining
                  Principal  Amortization Payments thereof) and (C) with respect
                  to all  amounts  prepaid  pursuant to Section  3.3(b)(iii)  or
                  Section  3.3(b)(v)(B),  pro  rata to (1) the  Swingline  Loans
                  (with a  corresponding  reduction in the  Revolving  Committed
                  Amount in an amount equal to all amounts  applied  pursuant to
                  this  clause  (1)),  (2) the  Revolving  Loans and  (after all
                  Revolving Loans have been repaid) to a cash collateral account
                  in respect of LOC Obligations (with a corresponding  reduction
                  in the  Revolving  Committed  Amount in an amount equal to all
                  amounts applied  pursuant to this clause (2)), (3) the Tranche
                  A Term Loan (ratably to the remaining  Principal  Amortization
                  Payments  thereof) and (4) the Tranche B Term Loan (ratably to
                  the  remaining  Principal   Amortization   Payments  thereof);
                  provided,  however,  that in connection  with a Sponsor Equity
                  Issuance  consummated  at a time that the Total Leverage Ratio
                  as of the most recent fiscal quarter end with respect to which
                  the Agent has received the Required  Financial  Information is
                  equal to or less than 6.5 to 1.0,  all amounts  required to be
                  prepaid pursuant to Section  3.3(b)(v)(B)  shall be applied by
                  the Borrower in the manner provided in Section 3.3(a).  One or
                  more holders of the Tranche B Term Loans may decline to accept
                  a  mandatory  prepayment  under  Section  3.3(b)(ii),  Section
                  3.3(b)(iii),  Section  3.3(b)(iv) or Section  3.3(b)(v) to the
                  extent there are sufficient  Tranche A Term Loans  outstanding
                  to be paid with such  prepayment,  in which case such declined
                  prepayments  shall be  allocated  pro rata among the Tranche A
                  Term  Loans  and the  Tranche  B Term  Loans  held by  Lenders
                  accepting  such  prepayments.  Within  the  parameters  of the
                  applications set forth above,  prepayments of Revolving Loans,
                  the  Tranche A Term Loan or the  Tranche B Term Loan  shall be
                  applied first to Base Rate Loans and then to Eurodollar  Loans
                  in direct order of Interest Period maturities. All prepayments
                  under this Section 3.3(b) shall be subject to Section 3.12 and
                  be  accompanied  by interest on the principal  amount  prepaid
                  through the date of prepayment.

     SUBPART 2.3 Amendments to Section 7.11. Section 7.11 of the Existing Credit
Agreement is hereby amended and restated in its entirety to read as follows:

         7.11     Financial Covenants.

         The Credit Parties shall cause:

     (a)  Fixed Charge  Coverage  Ratio.  The Fixed Charge Coverage Ratio, as of
          the last day of each fiscal quarter of the Consolidated Parties, to be
          at least:
                           (i)      for the period from September 30, 1999 to
                                    and including September 29, 2000, 0.60 to
                                    1.00;

                           (ii)     for the period from September 30, 2000 to
                                    and including December 30, 2000, 0.80 to
                                    1.00;

                                       5
<PAGE>
                           (iii)    at all times thereafter, 1.00 to 1.00.

     (b)  Interest  Coverage Ratio. The Interest  Coverage Ratio, as of the last
          day of each fiscal quarter of the Consolidated  Parties, to be greater
          than or equal to:

                           (i)      for the period from September 30, 1999 to
                                    and including March 30, 2000, 1.10 to 1.00;

                           (ii)     for the period from March 31, 2000 to and
                                    including June 29, 2000, 1.00 to 1.00;

                           (iii)    for the period from June 30, 2000 to and
                                    including September 29, 2000, 1.05 to 1.00;

                           (iv)     for the period from September 30, 2000 to
                                    and including December 30, 2000, 1.30 to
                                    1.00;

                           (v)      for the period from December 31, 2000 to
                                    and including December 30, 2001, 1.50 to
                                    1.00;

                           (vi)     for the period from December 31, 2001 to and
                                    including December 30, 2002, 1.85 to 1.0;

                           (vii)    for the period from December 31, 2002 to and
                                    including December 30, 2003, 2.00 to 1.0;
                           (viii)   for the period from December 31, 2003 to and
                                    including December 30, 2004, 2.25 to
                                    1.0; and

                           (ix)     at all times thereafter, 2.50 to 1.00.

     (c)  Senior Leverage  Ratio.  The Senior Leverage Ratio, as of the last day
          of each fiscal quarter of the Consolidated Parties, to be less than or
          equal to:

                           (i)      for the period from September 30, 1999 to
                                    and including June 29, 2000, 5.75 to 1.00;

                           (ii)     for the period from June 30, 2000 to and
                                    including September 29, 2000, 5.50 to 1.00;

                           (iii)    for the period from September 30, 2000 to
                                    and including December 30, 2000, 4.50 to
                                    1.00;

                           (iv)     for the period from December 31, 2000 to and
                                    including December 30, 2001, 3.25 to 1.00;

                           (v)      for the period from December 31, 2001 to and
                                    including December 30, 2002, 3.00 to 1.00;

                           (vi)     for the period from December 31, 2002 to and
                                    including December 30, 2003, 2.75 to
                                    1.00; and

                           (vii)    at all times thereafter, 2.50 to 1.00.

     (d)  Total Leverage Ratio.  The Total Leverage Ratio, as of the last day of
          each fiscal quarter of the  Consolidated  Parties,  to be less than or
          equal to:

                           (i)      for the period from September 30, 1999 to

                                       6
<PAGE>
                                    and including March 30, 2000, 10.00 to 1.00;

                           (ii)     for the period from March 31, 2000 to and
                                    including June 29, 2000, 10.50 to 1.00;

                           (iii)    for the period from June 30, 2000 to and
                                    including September 29, 2000, 10.00 to 1.00;

                           (iv)     for the period from September 30, 2000 to
                                    and including December 30, 2000, 8.00 to
                                    1.00;

                           (v)      for the period from December 31, 2000 to and
                                    including December 30, 2001, 6.00 to 1.00;

                           (vi)     for the period from December 31, 2001 to and
                                    including December 30, 2002, 5.50 to 1.00;

                           (vii)    for the period from December 31, 2002 to and
                                    including December 30, 2003, 4.75 to
                                    1.00; and

                           (viii)   at all times thereafter, 4.00 to 1.00.

     (e)  Minimum  Sock  Group  EBITDA.  The  portion  of  Consolidated   EBITDA
          attributable  to the Sock  Group,  as of the  last day of each  fiscal
          quarter of the Consolidated Parties for the twelve month period ending
          on such date, to be greater than or equal to:

                           (i)      for the period from September 30, 1999 to
                                    and including December 31, 2000,
                                    $32,000,000; and

                           (ii)     at all times thereafter, $33,000,000.

     (f)  Certain Cure  Rights.  Notwithstanding  any  provision to the contrary
          contained in this Credit  Agreement  (including,  without  limitation,
          Section  9.1(c)(i))  or in any other Credit  Document,  until the date
          that the Investment and Deposit  Agreement is terminated in accordance
          with the terms of Section 9.13  thereof,  (i) the Borrower  shall have
          the right to cure any Event of Default  resulting from  non-compliance
          by the Credit  Parties with Section  7.11(c) or Section  7.11(d) as of
          the end of any  fiscal  quarter  by  prepaying  the Loans  during  the
          Leverage  Grace  Period  for such  fiscal  quarter in an amount (in an
          integral  multiple of  $100,000)  that would have been  sufficient  to
          enable the Credit  Parties to comply with Section  7.11(c) and Section
          7.11(d) as of the last day of such fiscal  quarter if such  prepayment
          had been made on such date, with either (A) the Net Cash Proceeds of a
          Sponsor Equity Issuance in accordance with Section 3.3(b)(v)(B) or (B)
          the Net Cash  Proceeds  of a sale of all or any  portion  of the Shirt
          Group  in   accordance   with  Section   3.3(b)(iii)   and  (ii)  upon
          consummation of a sale of all or substantially  all of the Shirt Group
          while a Sale Moratorium is in effect and prepayment of the Loans in an
          amount  sufficient  to enable the Credit  Parties to be in  compliance
          with the financial  ratios set forth in Section  8.5(c)(ii)(A)  in the
          manner contemplated by Section  8.5(c)(ii)(B),  all Events of Defaults
          with  respect  to which a  Leverage  Grace  Period  is then in  effect
          automatically  shall be deemed to have been cured. Solely for purposes
          of  Section  7.11(c)  and  Section  7.11(d),  (i) the amount of Funded
          Indebtedness  of the  Consolidated  Parties  during any Leverage Grace
          Period  shall  be  calculated  by  giving  pro  forma  effect  to  the
          prepayment  of the Loans that would be  required  to enable the Credit
          Parties to comply with Section  7.11(c) and Section  7.11(d) as of the
          related  fiscal   quarter-end  (but  only  to  the  extent  that  such
          prepayment  actually  has not been  made)  and (ii) the  amount of the
          prepayment required to effect a cure of any Event of Default occurring
          as of the end of any fiscal quarter shall be determined without regard
          to the Senior Leverage Ratio or the Total Leverage Ratio as of the end
          of any subsequent fiscal quarter.

     SUBPART 2.4 Amendments to Section 8.5.  Section 8.5 of the Existing  Credit
Agreement is hereby amended and restated in its entirety to read as follows:

8.5 Asset Dispositions.

                  The  Credit   Parties  will  not  permit  the  Parent  or  any
         Consolidated  Party to make any Asset Disposition  (including,  without
         limitation,  any Sale and  Leaseback  Transaction)  other than Excluded
         Asset  Dispositions  unless (a) the  consideration  paid in  connection
         therewith  is at  least  75%  cash  or  Cash  Equivalents,  (b) if such
         transaction is a Sale and Leaseback  Transaction,  such  transaction is
         permitted by the terms of Section  8.13,  (c) the  Borrower  shall have
         delivered to the Agent a  certificate  of an  Executive  Officer of the
         Borrower  demonstrating (i) that upon giving effect to such transaction
         and the  application  of the Net Cash  Proceeds  thereof  no Default or
         Event  of  Default  would  exist  hereunder  and  (ii)  if  such  Asset

                                       7
<PAGE>
         Disposition  involves a sale of all or  substantially  all of the Shirt
         Group while a Sale Moratorium is in effect,  that upon giving effect on
         a Pro Forma  Basis to such  transaction  either  (A) the  Fixed  Charge
         Coverage  Ratio  would be at least 1.0 to 1.0,  the  Interest  Coverage
         Ratio would be at least 1.5 to 1.0, the Senior Leverage Ratio would not
         exceed 3.25 to 1.0 and the Total Leverage Ratio would not exceed 5.5 to
         1.0  or  (B)   concurrently   with  the   consummation  of  such  Asset
         Disposition,  the  Borrower  will  be  able  to  prepay  the  Loans  in
         accordance with Section  3.3(b)(iii) and/or Section  3.3(b)(v)(B) in an
         amount sufficient to enable the Credit Parties to be in compliance with
         the financial ratios set forth in the immediately preceding clause (A),
         and (d) no later  than 15 days  prior to such  Asset  Disposition,  the
         Agent and the Lenders shall have  received a certificate  of an officer
         of the Borrower specifying the anticipated or actual date of such Asset
         Disposition,  briefly  describing  the  assets to be sold or  otherwise
         disposed of and setting  forth the net book value of such  assets,  the
         aggregate  consideration  and the Net Cash  Proceeds to be received for
         such assets in connection with such Asset  Disposition,  and thereafter
         the Credit Parties shall,  immediately  following the  consummation  of
         such Asset  Disposition  apply (or cause to be applied) an amount equal
         to the Net Cash Proceeds of such Asset  Disposition to prepay the Loans
         (and cash  collateralize  LOC Obligations) in accordance with the terms
         of Section  3.3(b)(iii).  Notwithstanding  any provision of this Credit
         Agreement to the contrary,  no Asset Disposition  involving any portion
         of the Sock Group shall be permitted unless  simultaneously  all of the
         Credit  Party  Obligations  are repaid  and this  Credit  Agreement  is
         terminated in accordance with the terms of Section 11.13(b).

                  Upon a sale of Property or the sale of Equity  Interests  of a
         Consolidated  Party  permitted by this Section 8.5, the Agent shall (to
         the extent  applicable  and provided  that such Person is also released
         from any and all of its  obligations,  if any,  in respect of all other
         Indebtedness of the Credit Parties) deliver to the Credit Parties, upon
         the Credit Parties'  request and at the Credit Parties'  expense,  such
         documentation as is reasonably necessary to evidence the release of the
         Agent's  security  interest,   if  any,  in  such  Property  or  Equity
         Interests, including, without limitation, amendments or terminations of
         UCC financing statements, if any, the return of stock certificates,  if
         any,  and  the  release  of such  Consolidated  Party  from  all of its
         obligations, if any, under the Credit Documents.

     SUBPART 2.5 Amendments to Section 9.1. Subsection (l) of Section 9.1 of the
Existing Credit Agreement is hereby amended and restated in its entirety to read
as  follows  and the  following  new  subsection  (m) is  added to  Section  9.1
immediately succeeding such subsection (l):
                             9.1 Events of Default.
     An Event of Default shall exist upon the occurrence and continuation of any
of the following specified events (each an "Event of Default"):

                                                              **********

                  (l)      Ownership.  There shall occur a Change of Control; or

                  (m)      Investment and Deposit  Agreement.  There shall occur
                           and be continuing any "Event of Default" under, and
                           as defined in, the Investment and Deposit Agreement.

     SUBPART 2.6  Deletion of  Schedules  1.1A and  1.1A-1.  Schedules  1.1A and
1.1A-1 to the Existing Credit Agreement are hereby deleted in their entireties.


                                     PART 3
                           CONDITIONS TO EFFECTIVENESS

     SUBPART 3.1 Amendment No. 4 Effective  Date.  This  Amendment  shall be and
become  effective as of the date hereof (the  "Amendment No. 4 Effective  Date")
when all of the conditions  set forth in this Part 3 shall have been  satisfied,
and  thereafter  this  Amendment  shall be  known,  and may be  referred  to, as
"Amendment No. 4."

     SUBPART 3.1.1 Execution of Counterparts of Amendment.  The Agent shall have
received counterparts of this Amendment, which collectively shall have been duly
executed on behalf of each of the  Borrower,  the  Guarantors  and the  Required
Lenders.

     SUBPART 3.1.2 Vestar  Documents,  Legal  Opinion,  etc. The  Investment and
Deposit  Agreement shall have become effective in accordance with the provisions

                                       8
<PAGE>
of Section 3.1 thereof and the Agent shall have received  such other  documents,
agreements or information as is reasonably  requested by the Agent in connection
with the execution of the Investment and Deposit  Agreement,  including  without
limitation,  a legal opinion of Simpson Thacher & Bartlett in form and substance
reasonably satisfactory to the Agent.

     SUBPART  3.1.3  Other  Items.  The Agent  shall  have  received  such other
documents,  agreements or information  which may be reasonably  requested by the
Agent.

     SUBPART 3.1.4 Payment of Amendment Fees. The Agent shall have received, for
the account of each Lender that has  delivered an executed  counterpart  of this
Amendment to the Agent on or before 12 Noon  (Charlotte,  North  Carolina  time)
October 26, 1999, an amendment fee equal to 0.25% of the Commitment of each such
Lender under the Existing Credit Agreement.


                                     PART 4
                                 MISCELLANEOUS

     SUBPART 4.1 Representations and Warranties.  Borrower hereby represents and
warrants  to the  Agent  and the  Lenders  that,  after  giving  effect  to this
Amendment,  (a) no Default or Event of Default exists under the Credit Agreement
or any of the other Credit Documents and (b) the  representations and warranties
set forth in Section 6 of the  Existing  Credit  Agreement  are,  subject to the
limitations set forth therein,  true and correct in all material  respects as of
the date hereof (except for those which expressly relate to an earlier date).

     SUBPART 4.2  Reaffirmation of Credit Party  Obligations.  Each Credit Party
hereby ratifies the Credit  Agreement and acknowledges and reaffirms (a) that it
is bound by all terms of the Credit  Agreement  applicable to it and (b) that it
is responsible for the observance and full performance of its respective  Credit
Party Obligations.

     SUBPART 4.3  Cross-References.  References in this Amendment to any Part or
Subpart  are,  unless  otherwise  specified,  to such  Part or  Subpart  of this
Amendment.

     SUBPART  4.4  Instrument  Pursuant  to  Existing  Credit  Agreement.   This
Amendment  is a  Credit  Document  executed  pursuant  to  the  Existing  Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered  and applied in  accordance  with the terms and  provisions  of the
Existing Credit Agreement.
     SUBPART 4.5  References  in Other  Credit  Documents.  At such time as this
Amendment No. 4 shall become effective pursuant to the terms of Subpart 3.1, all
references in the Credit Documents to the "Credit  Agreement" shall be deemed to
refer to the Credit Agreement as amended by this Amendment No. 4.

     SUBPART 4.6  Counterparts/Telecopy.  This  Amendment may be executed by the
parties hereto in several  counterparts,  each of which shall be deemed to be an
original  and all of  which  shall  constitute  together  but  one and the  same
agreement. Delivery of executed counterparts of this Amendment by telecopy shall
be  effective  as an original  and shall  constitute  a  representation  that an
original shall be delivered.

     SUBPART 4.7 Governing Law. THIS AMENDMENT  SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

     SUBPART 4.8  Successors and Assigns.  This Amendment  shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and assigns.


                                       9
<PAGE>



         IN WITNESS  WHEREOF  the  Borrower,  the  Guarantors  and the  Required
Lenders have caused this  Amendment to be duly  executed on the date first above
written.

CREDIT PARTIES:                     CLUETT AMERICAN Corp.
--------------
                                            Cluett American Investment Corp.
                                            Cluett American Group, Inc.
                                            CONSUMER DIRECT CORPORATION
                                            ARROW FACTORY STORES, INC.
                                            GAKM RESOURCES CORPORATION
                                            CLUETT PEABODY RESOURCES CORPORATION
                                            CLUETT PEABODY HOLDING CORP.
                                            CLUETT, PEABODY & CO., INC.
                                            BIDERTEX SERVICES INC.
                                            GREAT AMERICAN KNITTING MILLS, INC.
                                            CLUETT DESIGNER GROUP, INC.
                                            BIDERMANN TAILORED CLOTHING, INC.

                                            By:
                                            Name:
                                            Title:























                                                        [Signatures Continued]

                                       10
<PAGE>


LENDERS:                         BANK OF AMERICA, N.A.
                                 (formerly known as NationsBank, N. A.)


                                 By:
                                 Name:
                                 Title:

                                 NATIONAL WESTMINSTER BANK PLC

                                 By:
                                 Name:
                                 Title:


                                 FLEET BANK, N.A.

                                 By:
                                 Name:
                                 Title:


                                 BANKBOSTON, N.A.

                                 By:
                                 Name:
                                 Title:


                                 FLEET BUSINESS CREDIT CORPORATION
                                 (successor in interest to Sanwa Business Credit
                                 Corporation)

                                 By:
                                 Name:
                                 Title:


                                       11
<PAGE>


                                 BANK AUSTRIA CREDITANSTALT
                                 CORPORATE FINANCE, INC.

                                 By:
                                 Name:
                                 Title:

                                 By:
                                 Name:
                                 Title:


                                 FIRST SOURCE FINANCIAL LLP,
                                 By:  First Source Financial Inc., its manager

                                 By:
                                 Name:
                                 Title:


                                 GENERAL ELECTRIC CAPITAL
                                 CORPORATION

                                 By:
                                 Name:
                                 Title:


                                 SUMMIT BANK

                                 By:
                                 Name:
                                 Title:


                                 HSBC BANK USA

                                 By:
                                 Name:
                                 Title:


                                 AG CAPITAL FUNDING PARTNERS, L.P.
                                 By:  Angelo Gordon & Co., L.P. as Investment
                                 Advisor
                                 By:
                                 Name:
                                 Title:


                                       12
<PAGE>



                                 NEW YORK LIFE INSURANCE COMPANY

                                 By:
                                 Name:
                                 Title:


                                 SENIOR DEBT PORTFOLIO
                                 By:  Boston Management and Research,
                                 as Investment Advisor

                                 By:
                                 Name:
                                 Title:


                                 ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.

                                 By:
                                 Name:
                                 Title:


                                 TORONTO DOMINION (TEXAS), INC.

                                 By:
                                 Name:
                                 Title:


                                 GREAT POINT CLO 1999-1 LTD.

                                 By: Sankaty Advisors, Inc., as
                                 Collateral Managers

                                 By:
                                 Name:
                                 Title:


                                 EATON VANCE SENIOR INCOME TRUST

                                 By:
                                 Name:
                                 Title:

                                       13