PARTIAL RELEASE AGREEMENT

     PARTIAL RELEASE  AGREEMENT,  dated as of May 12, 2000, by and among Bank of
America, N.A. f/k/a Nationsbank, N.A., as agent for the Lenders under the Credit
Agreement  referred to below (in such  capacity,  the "Agent"),  Great  American
Knitting  Mills,  Inc., a Delaware  corporation  ("Great  American")  and Cluett
American Corp., a Delaware corporation (the "Borrower").


                             W I T N E S S E T H :


     WHEREAS,  the Borrower,  Cluett American  Investment Corp., Cluett American
Group, Inc., the Subsidiary Guarantors party thereto (including Great American),
the Lenders party thereto, the Agent and Gleacher Natwest Inc., as documentation
agent, are parties to a Credit  Agreement,  dated as of May 18, 1998 (as amended
through the date hereof, the "Credit Agreement"),  pursuant to which the Lenders
agreed to extend credit to the Borrower;


                  WHEREAS,  the obligations of the Borrower to the Agent and the
Lenders under the Credit  Agreement are guaranteed by the Subsidiary  Guarantors
(including  Great American)  pursuant to the Credit Agreement and are secured by
the Collateral (as defined in the Credit Agreement);

                  WHEREAS,  the  Borrower,  Great  American and the other Credit
Parties (as defined in the Credit  Agreement)  have requested that the Agent and
the Lenders release any and all security  interests in the Collateral  described
on Schedule I attached hereto (the "Released Collateral") in connection with the
Receivables  Transfer  Agreement,  dated as of the date  hereof,  between  Great
American and Cluett  American  Receivables,  LLC, a Delaware  limited  liability
company and a wholly-owned subsidiary of Great American;

                  WHEREAS,  the Agent and the  Lenders  are  willing  to release
their security interests in the Released Collateral, on the terms and conditions
set forth herein;

                  NOW,   THEREFORE,   in   consideration  of  the  premises  and
agreements  herein,  the Borrower,  Great American and the Agent hereby agree as
follows:

                  1. All terms used herein that are defined in the Credit
Agreement and not otherwise  defined  herein are used herein as defined therein.

                  2. Without recourse and without any representation or warranty
of any kind except as expressly provided herein, (a) the Agent hereby terminates
and  releases  any and  all  liens,  security  interests  or  other  charges  or
encumbrances  in favor of the  Agent,  for the  benefit of the  Lenders,  or the
Lenders in the Released  Collateral which secures the Credit Party  Obligations,
and (b) the Borrower and Great American hereby release the Agent and the Lenders
from any duty,  liability or obligation (if any) under the Credit  Agreement and
any other Credit Document with respect to the Released Collateral.

                  3.  Concurrently  with its execution and delivery hereof,  the
Agent will execute and deliver to Great American the UCC-3 Financing  Statements
described  in Schedule II hereto and  releasing  its  security  interests in the
Released  Collateral  perfected by the filing of the UCC-1 Financing  Statements
described in such  Schedule  II. In addition,  at the request and the expense of
Great  American,  the Agent will promptly  execute and deliver to Great American
such additional  instruments and other writings,  and take such other action, as
Great American may  reasonably  request to effect or evidence the release of the
security interest of the Agent or the Lenders in the Released Collateral.

                  4.  The  Borrower  hereby  agrees  (i) to pay  all  costs  and
expenses in connection with the  preparation,  execution,  delivery,  filing and
recording  of this  Agreement,  the release  documents  executed in  furtherance
hereof,  and the  performance  of any other acts and the  execution of any other
documents  required  to effect the  release  of any  security  pursuant  hereto,
including,  without  limitation,  the fees and  disbursements  of counsel to the
Agent and the Lenders;  and (ii) to pay any and all stamp and other  transfer or
filing taxes and fees payable or determined to be payable in connection with the
execution and delivery hereof or any release document  pursuant  hereto,  and to
hold the Agent and the Lenders harmless from and against any and all liabilities
with  respect to or  resulting  from any delay in paying or omission to pay such
taxes or fees.

                  5. Except as otherwise expressly provided herein, the Borrower
and Great  American  confirm  and agree that (i) to the  extent  that any Credit
Document  purports  to assign or pledge to the  Agent,  for the  benefit  of the
Lenders,  or to grant to the Agent,  for the benefit of the Lenders,  a security
interest  in or lien  on,  any  collateral  as  security  for the  Credit  Party
Obligations  of the Credit  Parties from time to time existing in respect of the
Credit Documents, such pledge, assignment and/or grant of a security interest or
lien is hereby ratified and confirmed in all respects as security for all Credit
Party  Obligations,  whether now existing or hereafter  arising.  This Agreement
does not and shall not affect any of the Credit Party  Obligations of any Credit
Party under or arising from the Credit  Agreement or any other Credit  Document,
including,  without limitation,  the Borrower's obligation to repay the Loans in
accordance with the terms thereof and the Credit Agreement,  or the Credit Party
Obligations  of any other Credit  Party under any Credit  Document to which such
Person is a party,  all of which Credit Party  Obligations  shall remain in full
force and effect.  Except as expressly provided herein, the execution,  delivery
and  effectiveness of this Agreement shall not operate as a waiver of any right,
power or remedy of the Agent and the Lenders  under the Credit  Agreement or any
other Credit  Document,  nor  constitute a waiver of any provision of the Credit
Agreement or any other Credit Document.

                  6. The Agent  represents  and warrants that (i) to the best of
the Agent's knowledge,  but without conducting any searches in any filing office
of any  jurisdiction,  Schedule II hereto  accurately  lists all UCC-1 Financing
Statements on file in any filing office and having Great  American as debtor and
the Agent or any Lender as secured  party that have been filed  pursuant  to the
Credit  Documents and cover any Released  Collateral  and (ii) the Agent has all
requisite  authority pursuant to the Credit Documents  (including the consent of
the requisite  Lenders) to enter into this Agreement and to release the Released
Collateral hereunder.

                  7. This  Agreement  shall (i) be  binding  on the  Agent,  the
Lenders,  the Borrower and Great  American and their  respective  successors and
assigns,  and (ii) inure to the benefit of the Agent, the Lenders,  the Borrower
and Great American and their respective successors and assigns.

                  8.  This   Agreement   may  be   executed  in  any  number  of
counterparts and by the different parties hereto in separate counterparts,  each
of which  shall be deemed to be an  original,  but all of which  taken  together
shall constitute one and the same agreement.

                  9.       This Agreement shall be governed by and construed in
accordance with the law of the State of New York.



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

                                             GREAT AMERICAN KNITTING MILLS, INC.



                                              By:
                                              Name:
                                              Title:


                                              CLUETT AMERICAN CORP.

                                              By:
                                              Name:
                                              Title:


                                              BANK OF AMERICA, N.A., as Agent


                                              By:
                                              Name:
                                              Title:



<PAGE>

                                   SCHEDULE I

Released Collateral

                  All of Great American's right,  title, and interest in, to and
under all of the following,  whether now or hereafter owned, existing or arising
and wherever located:

                  (i) all Initial Receivables and Subsequent Receivables and all
payment and enforcement  rights (but none of the obligations of any Person) with
respect to such Initial Receivables and Subsequent Receivables,

                  (ii) all Related Security with respect to such Initial
Receivables and Subsequent Receivables,

                  (iii)all Collections, and

                  (iv)  any  and  all  proceeds  (including  without  limitation
"proceeds"  as defined in Section  9-306 of the UCC as in effect in the State of
New York), of and any and all amounts  received or receivable  under, any or all
of the foregoing.

                  Great   American   and  the  LLC   intend   the   transactions
contemplated by the Receivables  Transfer Agreement to constitute sales by Great
American to the LLC of the Receivables and the other items described above.

                  As used  herein,  the  following  terms have the  meanings set
forth below (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):

                  "Assignment"  means one or more  assignments of Receivables in
the form of Exhibit A to the Receivables Transfer Agreement.

                  "Collections"   means  (i)  all  payments,   collections   and
recoveries  received  or paid by or on behalf of the LLC,  the  Originator,  the
Servicer,  any  Obligor  or  any  other  Person  with  respect  to  the  Initial
Receivables  and Subsequent  Receivables  and all Related  Security with respect
thereto and (ii) all payments  made by the  Originator,  the Servicer or the LLC
under the Receivables Transfer Agreement and the Receivables Purchase Agreement.

                  "First Purchase Date" means May 12, 2000.

                  "Great American" means Great American Knitting Mills, Inc., a
 Delaware corporation.

                  "Initial  Receivables" means the Receivables  purchased by the
LLC from Great  American on the First Purchase Date and identified on Schedule I
to an Assignment  delivered by Great  American to the LLC on the First  Purchase
Date.

                  "LLC" means Cluett American Receivables, LLC.

                  "Obligor"  means  the  Person  or  Persons  obligated  to make
payments on a Receivable,  including  without  limitation  any guarantor of such
obligations.

                  "Originator" means Great American.

                  "Person" means any association,  partnership,  business trust,
company, corporation,  limited liability company, estate, joint venture, natural
person, trust or other entity.

                  "Receivables"  means  amounts due to Great  American,  whether
constituting  an account,  chattel  paper,  instrument,  or general  intangible,
arising in connection with the sale of socks.

                  "Receivables   Purchase   Agreement"   means  the  Receivables
Purchase  Agreement between the LLC, as seller,  and Banc of America  Commercial
Corporation,  as purchaser, as the same may be amended,  amended and restated or
otherwise modified from time to time.

                  "Receivables   Transfer   Agreement"   means  the  Receivables
Transfer Agreement between Great American,  as originator,  seller and servicer,
and the LLC, as purchaser,  as the same may be amended,  amended and restated or
otherwise modified from time to time.

                  "Related Security" means, with respect to each Receivable, (i)
all security  interests or liens and property  from time to time  purporting  to
secure payment of such Receivable, together with all financing statements signed
by an Obligor describing any collateral  securing such Receivable,  and (ii) all
guarantees,  insurance and other arrangements of whatever character from time to
time supporting or securing payment of such Receivable.

                  "Second  Purchase  Date" means the date on which the LLC shall
make a second purchase of Receivables under the Receivables  Transfer Agreement,
such date being mutually agreed between Great American and the LLC.

                  "Secured Party" means the LLC.

                  "Servicer" means Great American.

                  "Subsequent  Receivables"  means the Receivables  purchased by
the LLC from  Great  American  on the Second  Purchase  Date and  identified  on
Schedule I to an Assignment delivered by Great American to the LLC on the Second
Purchase Date.

                  "UCC"  mean the  Uniform  Commercial  Code as in effect in the
applicable jurisdiction.


<PAGE>


                                   SCHEDULE II

UCC-1 Financing Statements

<TABLE>
<S>                                 <C>                                          <C>                   <C>
Debtor                              Filing Office                                File Number            Date
----------------------------------- -------------------------------------------- ---------------------- --------------


Great  American   Knitting  Mills,  Secretary of State - North Carolina          0199830226             05/29/98
Inc.                                                                             0199830227             05/29/98
                                                                                 0199830246             05/29/98
                                                                                 0199830894             06/01/98

                                    Alamance County, North Carolina              98-1068                05/29/98
                                                                                 98-1077                06/01/98

                                    Catawba County, North Carolina               981422                 05/29/98
                                                                                 981425                 06/01/98

                                    Guilford County, North Carolina              475370                 06/01/98


                                    Halifax County, North Carolina               98-536                 06/01/98

                                    Orange County, North Carolina                98-628                 06/01/98

                                    Department of State - New York               115552                 06/01/98

                                    New York County, New York                    98PN34323              07/02/98

                                    Secretary of State - Pennsylvania            28981753               05/29/98
                                                                                 28991765               06/01/98

                                    Berks County, Pennsylvania                   98-1361ST              05/29/98
                                                                                 98-1407ST              06/03/98


                                    Montgomery County, Pennsylvania              275182                 06/01/98

</TABLE>


<PAGE>