<PAGE>
 
                                                                   EXHIBIT 10.33


               TERMINATION AGREEMENT AND MUTUAL GENERAL RELEASE

     This Termination Agreement and Mutual General Release ("Release") dated 
March 25, 1997, is entered into by and between Sport Chalet, Inc., a Delaware 
corporation ("Borrower"), and BankAmerica Business Credit, Inc., a Delaware 
corporation ("BABC").

     FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the 
parties agree to terminate the Loan and Security Agreement between them dated 
May 14, 1996, as amended ("Loan Agreement"), effective on the date hereof, and 
the parties hereby mutually release and forever discharge one another, and their
respective successors, representatives, assigns, officers, directors, agents, 
employees, and attorneys, and each of them, of and from any and all claims, 
demands, debts, liabilities, actions, and causes of action of every kind and 
character based upon or arising out of the Loan Agreement (except as hereinafter
specifically set forth).  Notwithstanding termination of the Loan Agreement, all
obligations of Borrower under the Loan Agreement which by their terms are 
intended to survive termination shall continue in full force and effect.

     The parties hereby specifically waive as against one another any rights 
they, or any of them, may have under Section 1542 of the California Civil Code, 
which provides as follows:

     A general release does not extend to claims which the creditor does not
     know or suspect to exist in his favor at the time of executing the
     release, which if known by him must have materially affected his settlement
     with the debtor.

     The parties hereby warrant and represent that they have not assigned or in 
any other way conveyed, transferred, or encumbered all or any portion of the 
claims or rights covered by this Release.  The parties, and each of them, 
execute this Release voluntarily, after consultation with counsel, and with full
knowledge of its significance.

     The release by BABC provided for herein is conditional upon the final
payment, in cash, of all of Borrower's "Obligations" (as defined in the Loan
Agreement) and all checks and other instruments delivered by Borrower to BABC,
and Borrower agrees to repay BABC, on demand, the amount of any such check or
other instrument that may be returned for nonpayment and any other Obligations
which remain unpaid. Borrower further agrees to indemnify BABC against any and
all claims, debts, liabilities, obligations, actions, proceedings, penalties,
judgments, causes of action, costs, and expenses (including, without limitation
attorneys' fees) of every kind, which BABC may sustain or incur as a result of
Borrower's failure to pay any payroll or other taxes of Borrower or as a result
of any other acts, omission, or occurrence relating to Borrower.

                                       1

<PAGE>
 
        This Release, the Loan Agreement, and the other written documents and 
instruments between the parties set forth in full all of the representations and
agreements of the parties, and this Release may not be modified or amended, nor 
may any rights hereunder be waived, except in a writing signed by the parties
hereto.

                                        SPORT CHALET, INC.


                                        By    /s/ Howard K. Kaminsky
                                              -------------------------
                                        Title  V. P. Finance
                                              -------------------------


                                        BANKAMERICA BUSINESS CREDIT, INC.
   

                                        By    /s/ Margret Lambka
                                              -------------------------
                                        Title  Vice President
                                              -------------------------
                                 
        The undersigned, Bank of America NT&SA ("Bank"), agrees to indemnify 
BankAmerica Business Credit, Inc.("BABC") from, and hold BABC harmless against, 
all losses and liabilities which BABC may incur at any time as a result of any 
nonpayment, claim, refund, or chargeback of any check or other item which has 
been credited by BABC to Borrower's account with BABC, together with any 
expenses or other charges incident thereto.  The amount of any such losses or 
liabilities indemnified hereunder shall be paid to BABC promptly by Bank upon 
BABC's demand therefor, and the amount of such demand shall be conclusive upon 
Bank.  Bank acknowledges and agrees that its obligation to make such payments 
shall not be conditioned upon any prior demand by BABC upon Borrower with 
respect thereto.

                                        BANK OF AMERICA NT&SA


                                        By  /s/ Jeff Thom
                                           --------------------------------
                                        Title  Vice President
                                              ----------------------------


                                       2