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                                                                   EXHIBIT 10.63

                    AMENDMENT TO LETTER OF CREDIT NO. S567170


                  Amendment to Letter of Credit No. S567170 issued by Swiss Bank
Corporation, New York Branch on December 18, 1996 (the "Letter of Credit") for
the account of Hanover Direct, Inc., a Delaware corporation (the "Company"), in
favor of Norwest Bank Minnesota, N.A., as Trustee under the Note Agreement (the
"Trustee"). Terms used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Letter of Credit.

                              W I T N E S S E T H:

                  WHEREAS, Swiss Bank Corporation, New York Branch has assigned
all or substantially all of its interests and obligations under the Letter of
Credit to Swiss Bank Corporation, Stamford Branch and Swiss Bank Corporation,
Stamford Branch has assumed all of the obligations of Swiss Bank Corporation,
New York Branch under the Letter of Credit;

                  WHEREAS, Swiss Bank Corporation, Stamford Branch has agreed to
extend the Scheduled Expiration Date of the Letter of Credit from February 18,
1998 to March 30, 1999; and

                  WHEREAS, Swiss Bank Corporation, Stamford Branch and the
Trustee wish to amend the Letter of Credit as provided herein.

                  NOW, THEREFORE, in consideration of the premises set forth
herein and other valuable consideration, the parties hereto hereby agree as
follows.

                  1. As of the date hereof, the Letter of Credit is hereby
amended as follows:

                  (a) The references throughout the Letter of Credit to Swiss
Bank Corporation, New York Branch are hereby amended to refer to Swiss Bank
Corporation, Stamford Branch. The parties hereto hereby agree that any
references in the Letter of Credit to "the Bank" shall be deemed to be
references to Swiss Bank Corporation, Stamford Branch.

                  (b) The address "10 East 50th Street, New York, New York
10022" set forth in various places throughout the Letter of Credit and the
Exhibits thereto is hereby deleted, and the following address is hereby
substituted in its place: "677 Washington Boulevard, Stamford, Connecticut
06901-3793".

                  (c) The language "(212) 574-4634 or (212) 574-



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4757; but only after first giving telephone notice to us by contacting Ms.
Virginia Gensch at the following telephone number: (212) 574-4654" is hereby
deleted from the second paragraph under the section entitled "Drawing and Method
of Payment" on page 2 of the Letter of Credit and the following language is
substituted in its place: "(203) 719-4634 but only after first giving telephone
notice to us by contacting Fran Martel at the following telephone number: (203)
719-3985".

                  2. Except as provided herein, the Letter of Credit shall
remain in full force and effect and unaffected hereby except as the Letter of
Credit shall be deemed to have been amended by the terms of this Amendment from
and after the date hereof.

                  3. This Amendment may be executed in one or more counterparts,
each of which taken together shall constitute an original and all of which shall
constitute one and the same instrument.

                  IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of this 18th day of February, 1998.

                                       SWISS BANK CORPORATION,
                                       Stamford Branch



                                       By:    /s/ James J. Diaz
                                            --------------------------------
                                       Name:  James J. Diaz
                                       Title: Director Banking Finance
                                              Support, N.A.


                                       By:    /s/ Thomas R. Salzano
                                            --------------------------------
                                       Name:  Thomas R. Salzano
                                       Title: Associate Director Banking Finance
                                              Support, N.A.


                                       NORWEST BANK MINNESOTA, N.A.,
                                       AS TRUSTEE



                                       By:    /s/ Paula Hecht
                                            --------------------------------
                                       Name:  Paula Hecht
                                       Title: Corporate Trust Officer


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