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                                                                    EXHIBIT 10.2

                                     RELEASE

      TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT Hanover
Direct, Inc., a Delaware corporation (the "Company"), on behalf of itself, its
subsidiaries, affiliates and their respective successors and assigns (such
persons and entities, the "RELEASOR"), in consideration of the sum of $1.00 and
other good and valuable consideration, receipt of which is hereby acknowledged,
hereby releases, discharges and acquits forever (i) Richemont Finance S.A., a
societe anonyme organized under the laws of the Grand Duchy of Luxembourg
("Richemont"), and all individuals heretofore or hereafter appointed or
designated by Richemont to serve as an officer, employee or member of the Board
of Directors of the Company (the "Richemont Designees"), (ii) the stockholders,
controlling persons, affiliates, agents, attorneys, representatives, employees,
officers and directors of Richemont, and (iii) the heirs, executors,
administrators, stockholders, controlling persons, affiliates, agents,
attorneys, representatives, employees, officers, directors, successors and
assigns of each of the foregoing (collectively, the "RELEASEES"), from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, liabilities,
obligations, controversies, agreements, promises, variances, trespasses,
damages, judgments, extents, executions, claims and demands whatsoever, whether
known or unknown, in law, admiralty or equity, which the RELEASOR or the
RELEASOR's subsidiaries, affiliates and their respective successors and assigns,
or any one claiming through or under any of them, ever had, now have or
hereafter can, shall or may have, for, upon, by reason of, related to, arising
out of, or connected in any way with, directly or indirectly (A) Richemont's
acts or omissions as a holder of capital stock of, or as a lender to, the
Company or (B) each Richemont Designee's acts or omissions in his or her
capacity as such.

      Nothing in this Release is intended to, nor shall, release or waive any
obligation of any RELEASEE under that certain Securities Purchase Agreement
dated August 23, 2000, between the Company and Richemont, the Agreement, dated
as of December 19, 2001, between the Company and Richemont, executed in
connection with this Release, or the Indemnification Agreement, dated as of
December 19, 2001, between the Company and Richemont, executed in connection
with this Release.

      To ensure that this Release is enforced in accordance with its terms, the
RELEASOR hereby acknowledges that it is familiar with Section 1542 of the Civil
Code of California and knowingly and voluntarily waives any rights or
protections afforded by that Section, 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 RELEASOR also knowingly and voluntarily waives all rights and benefits
it may have under comparable or similar statutes and principles of common law of
any and all states of the United States or of the United States.


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      The signatory to this Release hereby warrants and represents that he is
duly authorized to enter into this Release on behalf of the RELEASOR.

      This Release shall in all respects be interpreted, enforced and governed
under the laws of the State of Delaware without regard to Delaware's conflicts
of laws principles.

      Whenever text hereof requires, the use of the singular number shall
include the appropriate plural number.

      This Release may not be changed orally.

      IN WITNESS WHEREOF, this Release has been executed as of the date set
forth below.

                                    HANOVER DIRECT, INC.


                                    By:  /s/  Thomas C. Shull
                                       -----------------------------------------
                                       Name:  Thomas C. Shull
                                       Title: President and Chief Executive
                                              Officer


                                    Date: December 19, 2001


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                                 ACKNOWLEDGMENT

STATE OF NEW YORK )
                  )  ss.:
COUNTY OF NEW YORK)



      On the 19th day of December, 2001, before me personally came Thomas C.
Shull, to me known, who by me duly sworn, did depose and say that deponent
resides at 28 Leeward Lane, Riverside, Connecticut, that deponent is a duly
authorized officer of Hanover Direct, Inc., the entity described herein as
Releasor and which executed the foregoing Release, and that deponent signed
deponent's name thereto by authority of Hanover Direct, Inc.

                                                  /s/ Sarah Hewitt
                                                --------------------------------
                                                Notary Public





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