<PAGE>   1


                                                                    EXHIBIT 10.4

                                                         As of February 28, 1997





CONGRESS FINANCIAL CORPORATION
1133 Avenue of the Americas                    
New York, New York 10036                    
                                                  

                     Re:  Amendment to Financing Agreements

Gentlemen:

     Reference is made to the financing arrangements between CONGRESS FINANCIAL
CORPORATION ("LENDER") and THE RUG BARN, INC., HOME INNOVATIONS, INC., a
Delaware corporation, CALVIN KLEIN HOME, INC. and R.A. BRIGGS AND COMPANY
(individually and collectively, the "BORROWERS"), pursuant to which Lender may
extend loans, advances and other financial accommodations to Borrowers pursuant
to the terms and provisions of the Loan and Security Agreement dated November
12, 1996 among Borrowers, Decorative Home Accents, Inc., Draymore Mfg. Corp.,
Home Innovations, Inc., a New York corporation, and Lender (the "LOAN
AGREEMENT").  All capitalized terms used herein and not otherwise defined
herein shall have their respective meanings as defined in the Loan Agreement.

     Borrowers have requested that the Lender make additional loans, advances
and other financial accommodations to Borrowers under the Loan Agreement, which
Lender is willing to make, on and subject to the terms and conditions of the
Loan Agreement and the terms and conditions set forth in this Letter Re:
Amendment to Financing Agreements (the "AMENDMENT").  In consideration of the
foregoing, the parties hereto hereby agree as follows:

     1.   (a)  In addition to the loans and advances as set forth in the
Loan Agreement, Lender agrees, as a one-time financial accommodation to
Borrowers, to provide Borrowers with a line of credit (the "SUPPLEMENTAL
FACILITY") pursuant to which Lender agrees to make loans to Borrowers (each
such loan a "SUPPLEMENTAL LOAN", and all such loans, collectively, the
"SUPPLEMENTAL LOANS") up to an aggregate principal amount of $5,000,000
outstanding at any given time.  Each Supplemental Loan shall be a Revolving
Loan under the Loan Agreement and all references in the Loan Agreement to
"Revolving Loans" are hereby amended to include, within the definition thereof,
the Supplemental Loans.  With respect to the payment of interest, each
Supplemental Loan shall be a Prime Rate Loan and shall accrue interest at the
applicable Interest Rate set forth in the Loan Agreement for Prime Rate Loans
with such interest being payable in accordance with the terms of the Loan
Agreement.  Each Borrower's right to request a Supplemental Loan under the
Supplemental Facility shall terminate on June 20, 1997, 

<PAGE>   2

or earlier as hereinafter provided in paragraph 1(e) below (the "SUPPLEMENTAL   
FACILITY TERMINATION DATE") and all Supplemental Loans shall be repaid in full
on the Supplemental Facility Termination Date.  The outstanding amount of the
Supplemental Loans shall not be included in the calculation, from time to time,
of Borrowers' availability (as determined by Lender) under the lending formulas
in effect as of the date hereof under the Loan Agreement ("AVAILABILITY").  In
addition, the outstanding principal amount of the Supplemental Loans plus the
aggregate amount of the Loans (excluding the Supplemental Loans) and the Letter
of Credit Accommodations outstanding at any time shall not exceed the Aggregate
Maximum Credit.

         (b)  Borrowers acknowledge, confirm and agree that each request for a
Supplemental Loan shall be made by Borrowers' Representative in accordance with
Section 2.4 of the Loan Agreement, except that, so long as there is
Availability, Borrowers and Borrowers' Representative shall not make any
requests for a Supplemental Loan under the Supplemental Facility.

         (c)  Each Supplemental Loan may be prepaid in whole or in part without
penalty or premium, and Borrowers agree that at any time Borrowers have
Availability, Borrowers shall make a prepayment of the Supplemental Loans then
outstanding in the amount of such Availability.  In addition to, and not in
limitation of, anything to the contrary contained in the Loan Agreement, prior
to the occurrence of an Event of Default after Lender applies all proceeds of
Accounts and other Collateral in respect of the Revolving Loans and the other
Obligations then outstanding, Borrowers authorize and direct Lender to, and
Lender shall, apply any excess proceeds against the then outstanding
Supplemental Loans and the other Obligations payable under the Supplemental
Facility.

         (d)  At Lender's option, all payments required hereunder, together with
interest thereon, may be charged to any loan account of Borrowers maintained by
Lender.

         (e)  Immediately (i) upon the occurrence of an Event of Default, or
(ii) upon the receipt by Lender of a joint written request delivered by
Borrowers and TCW Special Credits Fund V-The Principal Fund to Lender (which
written request shall be confirmed by each of Borrowers' Representative and TCW
as being received by Lender) requesting that the Supplemental Facility be
terminated, the Borrowers' right to request a Supplemental Loan under the
Supplemental Facility shall terminate and all Supplemental Loans then
outstanding shall be immediately due and payable.

         (f)  Lender agrees that Lender will not make any Supplemental Loans to
Borrowers from and after the date that the Supplemental Facility is terminated.
Any loans made under the Loan Agreement in excess of the lending formulas as
set forth in the Loan Agreement from and after the date that the Supplemental
Facility is terminated shall not be deemed to be Supplemental Loans as provide
for in this paragraph 1.


                                     -2-
<PAGE>   3

         (g)  In the event that the Supplemental Loans are not repaid on the
Supplemental Facility Termination Date, or as otherwise provided for herein,
the same shall constitute an Event of Default under the Loan Agreement.

     2.  In consideration of Lender's willingness to establish the Supplemental
Facility and to make additional loans to Borrowers as set forth herein, in
addition to all other fees due and payable by Borrowers under the Loan
Agreement, Borrowers, jointly and severally, agree to pay to Lender a fee in
the amount of $75,000.  Such fee shall be fully earned as of the date hereof
and shall be payable as follows:  $25,000 payable contemporaneously with the
execution hereof; $25,000 on April 21, 1997 and $25,000 on May 21, 1997.  Such
fee may be charged by Lender to any loan account(s) of Borrowers maintained by
Lender.

     3.  This Amendment shall not constitute a waiver or amendment of any
provision of the Loan Agreement or any of the other Financing Agreements not
expressly referred to herein.  Except as expressly set forth herein, no other
changes or modifications to the Loan Agreement are intended or implied and the
Loan Agreement shall remain in full force and effect in accordance with its
terms.

     4.  This Amendment may be executed in counterparts, each of which, when
executed, shall be deemed to constitute one and the same Amendment.  The terms
and provisions of paragraph 1 and this paragraph 4 of this Amendment shall not
be amended or modified except in a writing signed by each of the signatories
hereto.

     5.  This Amendment shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.

                                         Very truly yours,                      
                                                                                
                                         THE RUG BARN, INC.                     
                                         HOME INNOVATIONS, INC.,                
                                         (A DELAWARE CORPORATION)               
                                         CALVIN KLEIN HOME, INC.                
                                         R.A. BRIGGS AND COMPANY                
                                                                                
                                         By: __________________________________
                                                                                
                                         Title: Executive Vice President of Each




                      [SIGNATURES CONTINUED ON NEXT PAGE]


                                     -3-

<PAGE>   4


                   [SIGNATURES CONTINUED FROM PREVIOUS PAGE]



ACCEPTED AND AGREED TO:

CONGRESS FINANCIAL CORPORATION

By: 
       -----------------------

Title:
       -----------------------

ACKNOWLEDGED AND AGREED TO:

DECORATIVE HOME ACCENTS, INC.
DRAYMORE MFG. CORP.

By: 
       -----------------------

Title: Executive Vice President of Each
       --------------------------------

HOME INNOVATIONS, INC.,
a New York corporation

By: 
       -----------------------

Title: Chief Financial Officer
       -----------------------

TCW SPECIAL CREDITS FUND V-
     THE PRINCIPAL FUND


By:  TCW ASSET MANAGEMENT COMPANY
Its: General Partner

     By: /s/ Stephen A. Kaplan 
         ------------------------
           STEPHEN A. KAPLAN   
     Its:  Authorized Signatory
                                     
     By: /s/ Richard J. Goldstein
         ------------------------                        
           RICHARD J. GOLDSTEIN
     Its:  Authorized Signatory



                                     -4-