Document:

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                                                                   Exhibit 10.7

[THE WHITE HOUSE LOGO]

June 17, 1999

Mr. Stephen L. Hirsch
8915 Magnolia Heights Court
Charlotte, NC 28270

Dear Steve:

RE:  MEMORANDUM OF UNDERSTANDING -- EMPLOYMENT OFFER -- THE WHITE HOUSE, INC.

Steve, we are all very pleased that you will be joining the Company. The
Company is poised for unusually rapid growth, and your expertise, experience,
reputation and work ethic will be extremely important for us. We are delighted
that you have made the decision to join our team. Recapping the items we
discussed relative to your employment with the Company listed below are the
issues we discussed. Please do not hesitate to call me if there is anything
you would like to discuss in more detail.

o   Title -- Vice President Finance and Administration, CFO.

o   Commencement date -- July 12, 1999.

o   Responsibilities -- To include all finance, administration, MIS including
    all communications such as phone, etc, human resource, purchasing
    (non-merchandising), loss prevention & security.

o   Equity -- We will provide 1% of the current outstanding shares of the
    company, including the shares allocated for the option program and the
    balance of the investment block not yet issued, as a stock option.
    Shares to be vested over a five-year period.

o   Remuneration -- Your base salary will be $140,000 per year for a minimum
    of two years, plus a "guaranteed" bonus of $10,000 paid semi-annually from
    the hire date for the first two years. Thereafter, the amount of bonus will
    be such that total compensation (bonus plus base salary) will be at least
    equal to but not exceed $155,000.

o   Relocation -- The Company will pay all out of pocket moving costs,
    temporary housing mutually agreed upon by both parties, and commuting
    costs associated with the move. In addition, the Company will pay for any
    commission greater than $10,000 associated with the sale of the house.
    Said payment to be made after the next material round of financing
    expected by October 15, 1999 but in no case later than December 15, 1999.
    Said payment to be "grossed" up to include any "tax effect". If the sale
    of the house has not been completed within three months of the hire date,
    the Company has the right to ask for an appraisal of your house, at it's
    cost, to determine the appropriateness of the asking price. The Company
    has the right to ask that your asking price be no greater than the
    appraised value of the home once the appraisal has been completed. Any
    additional closing costs would be split 50/50 Company and personal.

o   Severance -- In the event of a change of control (COC)*, resulting in a
    termination within a twelve-month period before or after such COC, the
    Company will offer a twelve-month (12)

           7600 ENERGY PARKWAY * BALTIMORE, MARYLAND 21226-1733
                      410-437-7747 * FAX 410-437-8922

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Page 2 -- Hirsch Letter

    severance lump sum payout. In the event of termination without cause**,
    the Company will provide a six-month (6) severance with an additional
    three (3) month notice of termination.

o   Benefit Programs -- You will be entitled to all benefits now offered by
    the Company including major medical, 401K, vacation, dental, and stock
    option plans over and above the initial stock option offer of 1%
    associated with this agreement.

Steve, I will call you later today to discuss and review. If there is anything
I can do to expedite or help you with this move, please let me know. I am
looking forward to working with you as a new partner.

Sincerely Yours,

/s/ Richard D. Sarmiento

Richard D. Sarmiento
President & CEO

* Change of Control -- Any event in which the current control of the Company
by consolidation, merger, or sale result in shareholders of the Company
immediately prior to such event possessing less than 60% of the total voting
power exercisable by all of the shareholders of the surviving or resulting
corporation, or the transfer of all or substantially all of the assets of the
Company to any person.

** Cause -- The Executive being convicted of a felony, or the material
failure of the Executive to comply with any material obligation imposed upon
the Executive pursuant to this Agreement if such failure continues uncured
(to the reasonable satisfaction of the Board) for thirty days after written
notice thereof to the Executive specifying in reasonable detail such failure.

RS:ms

CC: M. Millman

I have read the letter above and agree to the terms and conditions contained
therein:

/s/ Stephen L. Hirsch
-----------------------
Stephen L. Hirsch<Page>

                                                                   EXHIBIT 10.8

                      STOCK PURCHASE AND EXCHANGE AGREEMENT

            THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (this "Agreement") is
made as of January 15, 2002, by and among Anne Bernholz (the "Seller"), the
purchasers listed on EXHIBIT A attached hereto (the "Purchasers" and
individually a "Purchaser") and The White House, Inc., a Maryland corporation
(the "Company").

            WHEREAS, Seller owns shares of the Company's Class A Common Stock,
par value $.01 per share (the "Class A Common") and Seller desires to sell
certain of such shares to Purchasers, and Purchasers desire to purchase such
shares from Seller pursuant to the terms and conditions of this Agreement.

            WHEREAS, Purchasers and the Company desire that the shares of Class
A Common purchased from Seller herein be exchanged for an equal number of shares
of the Company's Class C Common Stock, par value $.01 per share (the "Class C
Common"). Such shares of Class C Common received under this Agreement shall be
deemed to be "Stockholder Shares" under that certain Stockholders Agreement
(the "Stockholders Agreement"), dated January 19, 1999, by and among the
Company, the Purchasers and certain other investors and executives of the
Company named therein.

            NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement, intending to be legally bound,
hereby agree as follows:

            1.    RECITALS. The foregoing recitals are made a part of this
Agreement.

            2.    PURCHASE AND SALE OF STOCK. At the Closing (as defined in
Section 4 hereof) and upon the terms and conditions set forth in this Agreement
(a) Seller shall sell, transfer and assign to Purchasers all of Seller's right,
title and interest in and to three hundred thousand (300,000) shares of Class A
Common (collectively, the "Shares"), and each of the Purchasers shall purchase
from Seller that number of shares set forth opposite each such Purchaser's name
on EXHIBIT A hereto. The purchase price for each Share shall be seventy-five
cents ($0.75), for an aggregate purchase price for all Shares sold and purchased
hereunder of Two Hundred Twenty-Five Thousand Dollars ($225,000.00).

            3.    EXCHANGE OF STOCK. Immediately after Purchasers' purchase of
the Shares pursuant to Section 2 hereof, subject to Section 4 hereof, the
Company shall issue to Purchasers, and Purchasers shall exchange the Shares for,
that number of shares of Class C Common equal to the number of shares of Class
A Common purchased pursuant hereto. Upon such exchange, the Shares shall be
cancelled. The Purchasers and the Company hereby agree and acknowledge that,
with respect to the Class C Common received hereunder, (a) for purposes of
determining the "Unpaid Yield" and "Unreturned Original Cost" (both as defined
in the Company's Articles of Amendment and Restatement, as amended (the
"Articles")), the "Original Cost" (as defined in the Articles) shall be
seventy-five cents ($0.75) per share of Class C Common and (b) the "Yield" (as
defined in the Articles) shall begin to accrue as of the date of Closing
hereunder.

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            4.    CLOSING: PAYMENT OF PURCHASE PRICE. The purchase and sale of
the Shares hereunder (the "Closing") shall take place on January 15, 2002, at
the offices of the Company, Suite A, 6711 Bay Meadow Drive, Glen Burnie,
Maryland 21060 at 10:00 a.m., or on such other date or at such other time and
place as may be mutually agreed upon by the parties. At the Closing, (a) Seller
shall deliver to the respective Purchaser(s) a stock certificate or certificates
representing the Shares to be sold to such Purchaser(s) by Seller, registered
in the respective Purchaser's name or accompanied by duly executed stock
assignments, and each Purchaser shall deliver the aggregate purchase price for
the Shares purchased from Seller, in the amount set forth on EXHIBIT A hereto,
by cashiers or certified check or by wire transfer of immediately available
funds to a bank account designated in writing by Seller and (b) upon delivery by
Purchaser of the stock certificates for the Shares duly endorsed to the Company,
the Company shall issue to such Purchaser an equal number of shares of Class C
Common.

            5.    TAX-FREE EXCHANGE. The exchange contemplated herein is
intended to be a tax-free exchange of shares of Class A Common for shares of
Class C Common, pursuant to Section 1036 of the Internal Revenue Code of 1986,
as amended.

            6.    REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to the Purchasers as of the date hereof that:

            (a)   OWNERSHIP. All of the Shares are owned of record and
beneficially by Seller, and Seller has good and marketable title to such Shares,
free and clear of all security interests, claims, liens, pledges, options,
encumbrances, charges, agreements, voting trusts, proxies and other arrangements
or restrictions whatsoever ("Encumbrances"). All of such Shares are validly
issued, fully paid and nonassessable and are not subject to any preemptive
rights or rights of first refusal. At the Closing, Seller shall transfer to the
respective Purchaser good and marketable title to such Shares purchased
hereunder, free and clear of all Encumbrances.

            (b)   CONFLICTS. The execution, delivery and performance of this
Agreement by Seller does not conflict with, violate or result in the breach of,
or create any Encumbrance on the Shares pursuant to, any agreement, instrument,
order, judgment, decree, law or governmental regulation to which Seller is a
party or is subject or by which the Shares are bound, except for federal and
state securities laws.

            (c)   DISCLOSURES. Seller is not aware of any material adverse
change in the financial condition, operating results, assets, liabilities,
operations or businesses of the Company since the date of the Company's most
recent audited financial statements. Seller has such knowledge and experience in
financial and business matters that she is capable of evaluating the merits and
risks of the proposed sale of the Shares. Seller has had adequate access to
pertinent Company information, including the ability to ask relevant questions
of its officers, in order to evaluate her decision to sell the Shares. Seller
acknowledges that the consideration paid by the Purchasers for the Shares is
derived from an arbitrary valuation of the Shares and does not reflect any
possible consideration which may be received for such Shares in any future sale,
public offering, merger, consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of the
Company.

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            (d)   AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by Seller, and this Agreement constitutes a valid and
legally binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization, and other similar laws now or hereafter
in effect relating to or affecting creditor's rights generally and the exercise
of judicial discretion.

            (e)   NO AGENTS, BROKERS, ETC. No agent, broker, person or other
firm acting on behalf of Seller is, or will be, entitled to any commission or
broker's or finder's fees in connection with the transaction contemplated
herein.

            (f)   NO MATERIAL MISSTATEMENTS. No representation or warranty made
by Seller in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements made not
misleading. Seller is not aware of any material fact relating to the Shares or
the transactions contemplated by this Agreement which has not been disclosed by
Seller to Purchasers.

            7.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Purchasers as of the date hereof that:

            (a)   CAPITAL STOCK. All of the Class C Common exchanged hereunder
is validly issued, fully paid and nonassessable and is not subject to, nor was
it issued in violation of, any preemptive rights, rights of first refusal or
anti-dilution protections (other than those waived (i) under Section 10 hereof
and (ii) pursuant to that certain Waiver Letter (the "Waiver Letter"), dated as
of January 15, 2002, by the Executives and the Investor (as defined therein)).
Pursuant to Section 3 hereof, the Company shall transfer to the respective
Purchaser good and marketable title to such Class C Common, free and clear of
all Encumbrances.

            (b)   CONFLICTS. The execution, delivery and performance of this
Agreement by the Company does not conflict with, violate or result in the breach
of, or create any Encumbrance on the Class C Common exchanged hereunder pursuant
to, any agreement, instrument, order, judgment, decree, law or governmental
regulation to which the Company is a party or is subject or by which such Class
C Common is bound, except for (i) federal and state securities laws and (ii)
those waived under Section 10 hereof and pursuant to the Waiver Letter.

            (c)   DISCLOSURES. The Company has delivered to the Seller and
Purchasers a copy of its most recent audited financial statements, and the
Company is not aware of any material adverse change in the financial condition,
operating results, assets, liabilities, operations or businesses of the Company
since the date of such financial Statements.

            (d)   AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by the Company, and this Agreement constitutes a valid
and legally binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization, and other similar laws now
or hereafter in effect relating to or affecting creditor's rights generally and
the exercise of judicial discretion.

                                        3
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            (e)   NO MATERIAL MISSTATEMENTS. No representation or warranty made
by the Company in this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements made not
misleading. The Company is not aware of any material fact relating to the Shares
sold hereunder, the Class C Common exchanged hereunder or the transactions
contemplated by this Agreement which has not been disclosed by the Company to
Purchasers or Seller.

            8.    REPRESENTATIONS AND WARRANTIES OF PURCHASER. Each Purchaser,
severally and not jointly and severally, hereby represents and warrants to
Seller as of the date hereof that:

            (a)   AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by Purchaser, and this Agreement constitutes a valid and
legally binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization, and other similar laws now
or hereafter in effect relating to or affecting creditor's rights generally and
the exercise of judicial discretion.

            (b)   INVESTMENT REPRESENTATIONS. Purchaser is an "accredited
investor" as defined in Rule 501 of Regulation D under the Securities Act.
Purchaser has such knowledge and experience in financial and business matters
that he (it) is capable of evaluating the merits and risks of the proposed
investment in the Shares and the Class C Common exchanged therefor
(collectively, the "Securities"). Purchaser understands that the Securities are
being sold in reliance upon exemptions from registration provided under the
Securities Act and applicable state securities laws and makes the
representations and warranties contained herein with the understanding that they
will be relied upon by the Company and Seller in determining the qualification
of the sale of the Securities under said exemptions. Purchaser hereby represents
that it is acquiring the Securities purchased hereunder or acquired pursuant
hereto for its own account with the present intention of holding such Securities
for purposes of investment, and that it has no intention of selling such
Securities in a public distribution in violation of the federal securities laws
or any applicable state securities laws.

            (c)   NO AGENTS, BROKERS, ETC. No agent, broker, person or other
firm acting on behalf of Purchaser is, or will be, entitled to any commission or
broker's or finder's fees in connection with the transaction contemplated
herein.

            (d)   NO MATERIAL MISSTATEMENTS. No representation or warranty made
by Purchaser in this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements made not
misleading. Purchaser is not aware of any material fact relating to the
transactions contemplated by this Agreement which has not been disclosed by
Purchaser to Seller.

            9.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the Closing hereunder.

            10.   WAIVERS. Solely for purposes of this Agreement and the
transaction contemplated hereby, each of the Purchasers, individually and
together as the holders of a

                                        4
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majority of the Stockholder Shares and Warrants (as defined in the Stockholders
Agreement), hereby waives (i) the restrictions on the Company to issue
securities pursuant to Section 3(D)(ii) and Section 3(D)(iii) of that certain
Stock Purchase Agreement, by and among the Company, and each of the Purchasers
set forth on the Schedule of Purchasers thereto, dated January 19, 1999; (ii)
the preemptive rights under Section 5 of the Stockholders Agreement and (iii)
the anti-dilution protections under Section 2 of the following warrants to
purchase Class A Common: Certificate No. W-l, Certificate No. W-3, Certificate
No. W-4, Certificate No. W-5, and Certificate No. W-6, all dated January 19,
1999.

            11.   STOCKHOLDERS AGREEMENT. Purchasers acknowledge and agree that
the shares of Class C Common received in the exchange pursuant to this Agreement
shall be subject to the terms and conditions of, and deemed to be "Stockholder
Shares" under, the Stockholders Agreement.

            12.   COMPLETE AGREEMENT. This Agreement (including all exhibits
hereto) constitutes the entire agreement between the parties hereto regarding
the subject matter of this Agreement and supersedes and preempts any prior
understandings, agreements or representations, written or oral, which may have
related to the subject matter hereof. This Agreement shall not be changed,
modified or amended except by written instrument signed by all of the parties
hereto.

            13.   COUNTERPARTS. This Agreement may be executed in two or more
counterparts (including by telecopy signature pages), each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.

            14.   FURTHER ASSURANCES. After the Closing, as and when requested
by Purchasers, Seller shall, without further consideration, execute and deliver
all such instruments of conveyance and transfer and shall take such further
actions as Purchasers may deem reasonably necessary or desirable in order to
transfer the Shares to Purchasers and to carry out fully the provisions and
purposes of this Agreement.

            15.   SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Purchasers and Seller and their
respective successors and permitted assigns.

            16.   APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without regard
to principles of conflicts of law.

            17.   TITLES AND HEADINGS. Titles and headings to sections herein
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

                            [SIGNATURE PAGE FOLLOWS.]

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     IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
and Exchange Agreement as of the date first above written.

WITNESS:                                    SELLER:

                                            /s/ Anne Bernholz
---------------------------                 -------------------------
                                            Anne Bernholz

                                            PURCHASERS:

                                            PHILLIPS-SMITH SPECIALTY RETAIL
                                                GROUP III, L.P.

                                            /s/ Cece Smith
---------------------------                 -------------------------
                                            Name:  Cece Smith
                                            Title: General Partner

                                            CHANCELLOR PRIVATE CAPITAL III, L.P.

                                            /s/ Howard Goldstein
---------------------------                 -------------------------
                                            Name:  Howard Goldstein
                                            Title:

                                            CITIVENTURE 96 PARTNERSHIP, L.P.

                                            /s/ Howard Goldstein
---------------------------                 -------------------------
                                            Name:  Howard Goldstein
                                            Title:

                     SIGNATURES CONTINUED ON FOLLOWING PAGE.

                                        6
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                                            CHANCELLOR PRIVATE CAPITAL
                                                 OFFSHORE PARTNERS II, L.P.

                                            /s/ Howard Goldstein
---------------------------                 -------------------------
                                            Name:  Howard Goldstein
                                            Title:

                                            CHANCELLOR PRIVATE CAPITAL
                                                 OFFSHORE PARTNERS I, C.V.

                                            /s/ Howard Goldstein
---------------------------                 -------------------------
                                            Name:  Howard Goldstein
                                            Title:

                                            COMPANY:

                                            THE WHITE HOUSE, INC.

/s/ [ILLEGIBLE]                             /s/ Richard D. Sarmiento
---------------------------                 -------------------------
                                            Name: Richard D. Sarmiento
                                            Title: President

                                        7
<Page>

                                    EXHIBIT A

<Table>
<Caption>
                              Total Shares
           Name                Purchased       Price/Share          Purchase Price
<S>                                <C>           <C>               <C>
Phillips-Smith Specialty           123,339       $    0.75         $     92,504.25
   Retail Group III, L.P.
Chancellor Private                  24,566       $    0.75         $     18,424.50
   Capital III, L.P.
Citiventure 96                     108,356       $    0.75         $     81,267.00
   Partnership, L.P.
Chancellor Private Capital          40,470       $    0.75         $     30,352.50
   Offshore Partners II,  L.P.
Chancellor Private Capital           3,269       $    0.75         $      2,451.75
   Offshore Partners I, C. V.

Total                              300,000                         $    225,000.00
</Table>

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