Exhibit 10.2.3


                                WAIVER AGREEMENT


         THIS WAIVER AGREEMENT (this "Waiver"), dated as of July 28, 1999, is by
and among Cluett American Corp.  (the  "Borrower"),  Cluett American  Investment
Corp.  (the  "Parent"),  Cluett  American  Group,  Inc.  ("Interco") and 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
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 and as amended as of May 27, 1998,  December 18, 1998 and March 19,
1999 (as so amended, the "Credit Agreement");

         WHEREAS, the Required Lenders have agreed to waive certain Defaults and
Events of Default as set forth herein;

         NOW,  THEREFORE,  in consideration of the agreements  herein contained,
the parties hereby agree as follows:

                                     PART I
                                   DEFINITIONS

     SUBPART 1.1. Certain  Definitions.  Unless otherwise  defined herein or the
context otherwise  requires,  the following term used in this Waiver,  including
its preamble and recitals, has the following meaning:

                  "Waiver 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 Waiver,  including its preamble
and recitals, have the meanings provided in the Credit Agreement.

                                     PART II
                                     WAIVER

         The  Required  Lenders  hereby waive the Defaults and Events of Default
caused by the Borrower's failure to comply with the requirements of Section 7.11
of the Credit Agreement for the fiscal quarter ended June 30, 1999.

                                    PART III
                           CONDITIONS TO EFFECTIVENESS

     SUBPART  3.1.  Waiver  Effective  Date.  This  Waiver  shall be and  become
effective  as of June 30,  1999 (the  "Waiver  Effective  Date") when all of the
conditions set forth in this Part III shall have been satisfied.

     SUBPART 3.2.  Execution  of  Counterparts  of Waiver.  The Agent shall have
received  executed  counterparts  (or other  evidence  of  execution,  including
facsimile  signatures,   satisfactory  to  the  Agent)  of  this  Waiver,  which
collectively  shall have been duly  executed on behalf of each of the  Borrower,
the Guarantors and the Required Lenders.

     SUBPART 3.3.  Other  Documents.  The Agent shall have  received  such other
documents as the Agent may reasonably request.


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<PAGE>



                                     PART IV
                                  MISCELLANEOUS

     SUBPART  4.1.  Cross-References.  References  in this Waiver to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this Waiver.

     SUBPART  4.2.  Instrument  Pursuant to Credit  Agreement.  This Waiver is a
Credit  Document  executed  pursuant to the Credit  Agreement  and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement.

     SUBPART  4.3.  Representations  and  Warranties.  Each Credit  Party hereby
represents and warrants that (i) each Credit Party that is party to this Waiver:
(a) has the  requisite  corporate  power and  authority to execute,  deliver and
perform this Waiver, as applicable,  and (b) is duly authorized to, and has been
authorized by all necessary  corporate action,  to execute,  deliver and perform
this  Waiver,  (ii) the  Borrower  has no  claims,  counterclaims,  offsets,  or
defenses  to the  Credit  Documents  and  the  performance  of  its  obligations
thereunder, or if the Borrower has any such claims,  counterclaims,  offsets, or
defenses  to the  Credit  Documents  or any  transaction  related  to the Credit
Documents,   the  same  are  hereby   waived,   relinquished   and  released  in
consideration of the Lenders'  execution and delivery of this Waiver,  (iii) the
representations  and warranties  contained in Section 6 of the Credit  Agreement
are,  subject to the  limitations  set forth  therein,  true and  correct in all
material  respects on and as of the date hereof as though made on and as of such
date (except for those which expressly relate to an earlier date) and (iv) after
giving  effect to this Waiver,  no Default or Event of Default  exists under the
Credit  Agreement  on and as of the date hereof or will occur as a result of the
transactions contemplated hereby.

     SUBPART 4.5. Liens. The Borrower and the Guarantors, as applicable,  affirm
the liens and security interests created and granted in the Credit Documents and
agree that this Waiver shall in no manner  adversely affect or impair such liens
and security interest.

     SUBPART 4.6.  Acknowledgment of Guarantors.  The Guarantors acknowledge and
consent to all of the terms and  conditions  of this  Waiver and agree that this
Waiver and all  documents  executed  in  connection  herewith  do not operate to
reduce or discharge the Guarantors'  obligations  under the Credit  Agreement or
the other Credit Documents.  The Guarantors  further  acknowledge and agree that
the Guarantors have no claims, counterclaims, offsets, or defenses to the Credit
Documents and the  performance of the Guarantors'  obligations  thereunder or if
the Guarantors did have any such claims,  counterclaims,  offsets or defenses to
the Credit  Documents or any transaction  related to the Credit  Documents,  the
same are hereby  waived,  relinquished  and  released  in  consideration  of the
Lenders' execution and delivery of this Waiver.

     SUBPART 4.7. No Other Changes. Except as expressly modified in this Waiver,
all the terms,  provisions and conditions of the Credit  Documents  shall remain
unchanged and shall continue in full force and effect.

     SUBPART  4.8.  Counterparts.  This  Waiver may be  executed  by the parties
hereto in several counterparts (including facsimile counterparts), each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement.

     SUBPART 4.9.  Entirety.  This Waiver,  the Credit  Agreement  and the other
Credit Documents  embody the entire agreement  between the parties and supersede
all prior agreements and understandings,  if any, relating to the subject matter
hereof. These Credit Documents represent the final agreement between the parties
and may not be contradicted by evidence of prior,  contemporaneous or subsequent
oral agreements of the parties.

     SUBPART 4.10.  Governing Law. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES  HEREUNDER  SHALL BE GOVERNED BY AND  CONSTRUED AND  INTERPRETED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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<PAGE>





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

BORROWER:                           CLUETT AMERICAN Corp.

                                      By:
                                           Name:    Bryan P. Marsal
                                           Title:   President


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

                                      By:
                                           Name:    Bryan P. Marsal
                                           Title:   President










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<PAGE>



LENDERS:                                 BANK OF AMERICA, N. A., formerly
                                         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:









                             [Signatures Continued]

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<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:


                                        THE LONG-TERM CREDIT BANK OF JAPAN,
                                        LIMITED, NEW YORK BRANCH

                                        By:
                                      Name:
                                     Title:


                                        SUMMIT BANK

                                        By:
                                      Name:
                                     Title:


                                        MARINE MIDLAND BANK

                                        By:
                                      Name:
                                     Title:





                             [Signatures Continued]

                                       17
<PAGE>


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

                                        By:
                                      Name:
                                     Title:


                                        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:


                                        STRATA FUNDING LTD.

                                        By:
                                      Name:
                                     Title:


                                        SANKATY HIGH YIELD ASSET PARTNERS, L.P.

                                        By:
                                      Name:
                                     Title:


                             [Signatures Continued]

                                       18
<PAGE>


                                        MERRILL LYNCH SENIOR FLOATING
                                        RATE FUND, INC.

                                        By:
                                      Name:
                                     Title:


                                        EATON VANCE SENIOR INCOME TRUST

                                        By:
                                      Name:
                                     Title:


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