EXHIBIT 10.2

                                             December 28, 1999


UNITED RETAIL GROUP, INC.
UNITED RETAIL INCORPORATED
365 West Passaic Street
Rochelle Park, NJ  07662

We refer to the Financing Agreement by and among United Retail Group, Inc.
("URGI"), United Retail Incorporated ("URI" and together with URGI the
"Companies"), the CIT Group/Business Credit, Inc., as Agent and Lender,
FirsTrust Bank, as lender and other parties hereafter becoming Lenders
thereunder, dated August 15, 1997, as amended (herein the "Agreement").
Capitalized terms used and not otherwise defined herein shall have the
meanings specified therein unless otherwise specifically defined herein.

This letter is to confirm that pursuant to mutual consent and
understanding, effective as of the date hereof, the Agreement shall be
amended as follows:

1.    The following definition shall be, and hereby is, included in Section 1
of the Agreement:

      "PERMITTED INVESTMENTS shall mean any of the following investments:
       ---------------------

            a. marketable direct obligations issued by, or unconditionally
      guaranteed by, or insured by the United States of America or issued
      by any agency thereof and backed by the full faith and credit of the
      United States, in each case maturing within three years from the date
      of acquisition thereof;

            b. marketable direct obligations issued by any state of the
      United States of America or any political subdivision of any such
      state or any public instrumentality thereof maturing within one year
      from the date of acquisition thereof and, at the time of acquisition,
      having a rating of at least A-1 or the equivalent thereof from either
      Standard & Poors Ratings Group or P-1 or the equivalent thereof from
      Moody's Investors Services, Inc.;

            c. commercial paper maturing no more than nine months from the
      date of acquisition thereof and, at the time of acquisition, having a
      rating of at least A-1 or the equivalent thereof from Standard &
      Poor's Ratings Group or at least P-1 or the equivalent thereof from
      Moody's Investors Service, Inc.;

            d. corporate notes maturing no more than nine months from the
      date of acquisition thereof and, at the time of acquisition, having a
      rating of at least A or the equivalent thereof from Standard & Poors
      Rating Group or at least A-2 or the equivalent thereof from Moody's
      Investors Service, Inc.;

            e. certificates of deposit (including those denominated in
      Euro Dollars), time deposits or acceptances maturing within ninety
      days from the date of acquisition thereof issued by any commercial
      bank organized under the laws of the United States of America or any
      state thereof or the District of Columbia or any United States branch
      of a foreign bank having at the calendar year-end immediately
      preceding the date of acquisition thereof combined capital and
      surplus of not less than $500,000,000 which has or, the holding
      company of which has at the date of acquisition thereof, a commercial
      paper rating meeting the requirement specified in clause (c) above;

            f. repurchase obligations with a term of not more than ninety
      days for underlying securities of the types described in clause (a)
      above entered into with any bank meeting the qualifications specified in
      clause (e) above;

            g. preferred stock issued by corporations which provides for 30
      days redemption rights to the holder and which, at the time of
      acquisition, has a rating of at least A or the equivalent thereof
      from Standard & Poors Rating Group or at least A-2 or the equivalent
      thereof from Moody's Investor Service, Inc.; and

            h. investments in mutual funds having assets in excess of
      $500,000,000 at the calendar year-end immediately preceding the date
      of acquisition thereof (and which provide for 30 day redemption
      rights) which invest substantially all of their assets in securities
      of the types described in clauses (a) through (g) above.

2.    The following shall be, and hereby is, included at the end of Paragraph
      8 H, Section 6 of the Agreement:

      "and (iii) Permitted Investments;"

Except as herein specifically provided, the Agreement remains in full force
and effect in accordance with its terms and no other changes in the terms
or provisions of the Agreement is intended or implied. If you are in
agreement with the foregoing, please so indicate by signing and returning
to us the enclosed copy of this letter.

                                 Very truly yours,

                                 THE CIT GROUP/BUSINESS CREDIT, INC., as
                                 Agent and Lender

                                 By: /s/ Karen Hoffman
                                     ---------------------------------------
                                 Title:   Vice President

                                 FIRSTRUST BANK, as Lender

                                 By: /s/  Kent Nelson
                                     ---------------------------------------
                                 Title:   Vice President


Read and Agreed to:

UNITED RETAIL GROUP, INC.

By: /s/ Jon Grossman
    ----------------------------
Title: Vice President - Finance


UNITED RETAIL INCORPORATED


By:  /s/ Kenneth P. Carroll
   ------------------------------
Title:  President