EXHIBIT 10

                                                              September 11, 1996


Mr. Brian Levy
7408 Baychase Drive
Arlington, Texas  76016

Dear Mr. Levy:

          This letter sets forth the terms of your employment with Levitz
(Levitz being defined for this purpose as Levitz Furniture Corporation or any of
its subsidiaries). You agree to devote your primary working time, skill,
attention and best efforts to the business of Levitz as President of Store
Operations of Levitz at Levitz's Boca Raton, Florida offices or in such other
similar executive position or office as Levitz's Chief Executive Officer may
designate.

          In consideration of your services as set forth above, and for other
good and valuable consideration, receipt of which is hereby acknowledged, Levitz
hereby agrees as follows:

          1. BASE SALARY. Your annual base salary will be $250,000 to be paid
in accordance with Levitz's normal payroll procedures.

          2. PERFORMANCE BONUS. You will participate in Levitz's annual
performance bonus program for officers, as that program may be amended from time
to time, with a maximum annual bonus of 50% of your base salary. For the fiscal
year ending March 31, 1997, you will receive a bonus of at least $25,000 from
that program.

          3. SIGNING BONUS. You will receive a signing bonus of $25,000 payable
within three business days after you report for work at Levitz's offices in Boca
Raton, Florida.

          4. STOCK OPTION GRANT. As soon as possible after the date hereof, you 
will receive, subject to grant by the Compensation Committee of the Board of
Directors of Levitz Furniture Incorporated (LFI), options to purchase 60,000
shares of the common stock of LFI at an exercise price equal to the average of
the high and low prices of such stock on the New York Stock Exchange on the date
of grant and on the terms as determined by such Compensation Committee. Provided
that all such options shall be exercisable in various increments starting one
year from date of grant, and all such options will be fully exercisable no later
than three years from date of grant.

             In the event that such exercise price is greater than $4-7/8 per 
share the Company shall cause additional shares to be issued to you, or make
alternative payment arrangements in order to fairly compensate you for such
increase in exercise price.

          5. RELOCATION EXPENSES. It is understood that you will sell your home
in the Arlington, Texas area. Levitz will reimburse you for the cost of
reasonable real estate commissions, transfer taxes and closing costs and fees as
normally paid by a home seller in that area. Levitz will also pay your household
moving expenses from Arlington, Texas to Boca Raton, Florida in accordance with
Levitz's relocation procedures for officers, which will include reimbursement
for the expense of one house hunting trip of up to three days and the movement
of two personal cars. Levitz will also reimburse you an amount equal to your
regular mortgage payments (principal, interest, property taxes and homeowner's
insurance) on your present house located at 7408 Baychase Drive, Arlington,
Texas 76016 for a period of eight months from the date of this letter or the
date of closing of escrow on such house, whichever comes first.

             Furthermore, if you sell your house for less than its market value,
then Levitz will pay you the difference between the price you sell your house
for and its market value. The market value will be the average of two appraisals
of the house, one appraiser being selected by you and the other by the Company.

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          6. SEVERANCE BENEFITS. Levitz shall have the right to terminate your
employment at any time.

             (a) If such termination is for "gross misconduct," then such 
termination shall become effective immediately. Levitz shall have only those
rights or obligations which may have accrued prior to such termination. You
shall be entitled to all earned and unpaid salary to the date of termination as
well as all other benefits which may be due you pursuant to and subject to any
of Levitz's health or welfare plans in which you are a participant. "Gross
misconduct" for purposes of this letter shall mean that you have been convicted
of, or have pleaded NOLO CONTENDERE to, a felony, whether or not related to
Levitz's business, or you were guilty of reckless or wilful misconduct in
performance of your duties hereunder. Levitz's right to terminate your
employment shall be in addition to any other rights it may have against you.

             (b) If such termination is for any reason other than "gross 
misconduct," your death or disability, you shall be entitled to receive
severance benefits from Levitz as set forth below:

                 (i) If such subsection (b) termination occurs within the first 
12 months after the date of this letter, you will continue to receive your then
annual salary for a period equal to 24 months less the number of months elapsed
from the date of this letter to the date of such termination. However, any
amounts paid in excess of 12 months of salary are subject to reduction by the
amount of compensation received, in any form, from a successor employer.

                  (ii) If such subsection (b) termination occurs more than 12
months from the date of this letter, Levitz will continue to pay your annual
salary for 12 months.

                       In the event of a subsection (b) termination, you will
also be entitled to receive your guaranteed bonus or a pro-rata earned but
unpaid performance bonus and you will receive all other benefits which may be
due you pursuant to and subject to the provisions of any Levitz health or
welfare plan in which you are a participant.

             (c) In the event of a subsection (b) termination you may elect to 
receive a lump sum payment, in lieu of continuing periodic payments, equal to
the present value of such periodic payments, using a 5% discount rate.

             (d) In the event of a subsection (b) termination you will be deemed
to have an additional three years of age and service for the purposes of the
Company's Supplemental Executive Retirement Plan ("SERP").

          7. CHANGE OF CONTROL. Within 30 days after a Change In Control (as 
defined in Exhibit A attached hereto) all your stock options will be exercisable
regardless of the date of grant. If within twelve months after a Change In
Control, (i) your employment is terminated by Levitz for other than "gross
misconduct," death or disability, or (ii) you elect to terminate your employment
within 90 days of the occurrence of a Good Cause Event (as defined on Exhibit A
attached hereto), Levitz will (i) continue to pay your annual salary for a
period of 18 months, (ii) pay you an amount equal to the average of your
performance bonus awarded over the last three years or, if you have been
employed by the Company for less than three years, the average of such bonus
awarded during your term of employment with the Company, (iii) continue your
health and welfare benefits as set forth in paragraph 6 above for such 18 month
period, and (iv) you will be deemed to have an additional three years of age and
service for purposes of the SERP.

             You may elect to receive a lump sum payment, in lieu of continuing
periodic payments payable hereunder, equal to the present value of such periodic
payments using a 5% discount rate.

             Salary benefits paid after a Change in Control are not subject to
mitigation.

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          8. DEATH AND DISABILITY. If your employment is terminated pursuant to
your death or disability, neither your estate nor you will be entitled to any
severance benefits except as may be payable pursuant to a Levitz health or
welfare benefit plan in which you are a participant. For purposes of this
letter, "disability" means your inability to perform the services to be rendered
by you hereunder due to illness or injury and such inability continues for a
period of six months in any twelve-month period.

          9. SERP AND LIFE INSURANCE. You will be a participant in the SERP 
according to the terms of such plan as described in Levitz Furniture
Incorporated's Annual Report for the year ended March 31, 1996. While you are
employed by the Company, the Company will arrange for and pay the premiums for a
life insurance policy on your life in an amount not less than $300,000. Such
policy will be owned by you.

          10. MISCELLANEOUS. This letter contains the entire understanding of 
you and Levitz regarding your employment with Levitz. The terms of this letter
shall be governed by the laws of the State of Florida and may be modified except
by a writing signed by both of us.

          If these terms are acceptable to you, please sign below and return one
copy of this letter to me.

                                            Levitz Furniture Corporation


                                            By: /s/ MICHAEL BOZIC
                                                -----------------
                                                Michael Bozic
                                                Chief Executive Officer
Accepted and Agreed to:



/s/ BRIAN LEVY
--------------
Brian Levy

Date:  September 11, 1996

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