Letter Of Credit

HongkongBank Letter of Credit Service for the Talbots, Inc.

by Talbots
May 1st, 1997




                                  EXHIBIT 10.32

                     [LETTERHEAD OF HSBC CORPORATE BANKING]


CONFIDENTIAL
The Talbots, Inc.
175 Beal Street
Hingham, MA 02043

Attention:        Sandy F. Katz
                  VP, Audit and Control

April 19, 1996

Dear Sandy

HongkongBank Letter of Credit Service for The Talbots, Inc.

The Hongkong and Shanghai Banking Corporation Limited is pleased to make
available to your company a US$15,000,000 uncommitted Letter of Credit Facility.

It is understood that this offering is not a committed facility and availability
under the facility shall remain subject to our sole discretion and our
overriding right of repayment on demand.

Either of us may terminate this facility with respect to future advances at any
time upon notice to the other party. In the event of termination by either
party, your company's obligations under this facility and associate
documentation shall remain in force until the outstanding balance borrowed or
other credit extended to you under this facility, together with all accrued
interest and any other sums, have been paid in full.

This facility will be made available on the following basis:


Borrower:             The Talbots, Inc.

Lender:               The Hongkong and Shanghai Banking Corporation
                      Limited, New York ("Bank").

Purpose of facility:  Issuance of Commercial Sight Letters of Credit ("L/C").

Amount of facility:   US$15,000,000.

Tenor:                Facility is uncommitted and is therefore
                      made available at Bank's discretion.

Facility Termination: Bank to advise Borrower in writing.





Maximum validity of L/Cs:  364 days.

Repayment of L/C drawings:  Borrower will cover L/C issuing bank the following
                      U.S. business day after receiving demand (non-discrepant
                      or drawings with accepted discrepancies).

Fees - Borrower:      Letter of Credit Issuing and Amendment - Nil.
                      Hexagon in the U.S. - Nil.
                      Payment of documents presented via HSBC Group branches
                                          - Nil.
                      Payment of documents presented via third party banks 
                                          - 0.125% minimum $65.00.

Collateral:           Unsecured.

Availability:         Upon completion of documentation.

Documentation:        Continuing Letter of Credit Agreement
                      Hexagon Customer Agreement
                      Current Account opening documentation
                      Certified true copy of The Talbots, Inc. `Certificate of 
                      Corporate Resolution'

Financial Covenants:  Nil.

Reporting Requirement: 10K and 10K within 90 days of period end.

Unless this facility is terminated, we will fully review the credit basis for
this uncommitted facility at least annually upon submission of appropriate
financial information.

Please arrange for authorized signatories of your company, in accordance with
the Certificate of Corporate Resolution (noted above) to be provided to the
Bank, to sign and return to use the duplicate copy of this letter to signify
your understanding and acceptance of the terms and conditions under which the
facility is granted.





We are pleased to be of continued assistance to you and look forward to
developing a long-term and mutually beneficial relationship with Talbots, both
in the US and overseas.

Yours sincerely


/s/J C Holsey
- --------------------------
J C Holsey
Executive Vice President

Signed:
For The Talbots, Inc.:

s/s Edward L. Larsen

Its: Senior Vice President-Finance

Date:   5/15/96






                     CONTINUING COMMERCIAL LETTER OF CREDIT

                                       AND

                               SECURITY AGREEMENT


         For the purpose of inducing The Hongkong and Shanghai Banking
Corporation Limited, with offices at 140 Broadway ("Bank"), to issue one or more
letters of credit (each individually a "Credit" and collectively the "Credits")
in Bank's sole discretion from time to time, upon application by the undersigned
("Applicant"), the Applicant hereby agrees as follows:

         1.       Payment Obligation.

                  (a) Applicant unconditionally agrees to reimburse Bank, on
demand, each amount paid by Bank with respect to any draft or demand for payment
under, or purporting to be under, any Credit at such office of Bank as specified
by Bank.

                  (b) As to any draft or demand for payment which is payable in
United States Dollars, Applicant shall reimburse Bank in United States Dollars.
As to any draft or demand for payment which is payable in a currency ("Alternate
Currency") other than United States Dollars, Applicant shall reimburse Bank, as
Bank in its sole discretion may elect, either (i) in such Alternate Currency or
(ii) in United States Dollars, in which case the amount to be paid by Applicant
to Bank shall be the equivalent amount in United States Dollars of the amount
payable in the Alternate Currency under such draft or demand for payment, such
draft was paid or demand honored for the sale by Bank of such Alternate
Currency. Applicant shall comply with any and all governmental exchange
regulations now or hereafter applicable to any foreign exchange provided to Bank
pursuant to this Section 1(b) and will indemnify and hold Bank harmless from any
failure to so comply. Applicant assumes all risks (political, economic or
otherwise) of disruptions or interruptions in currency exchange with respect to
any demand payable in an Alternate Currency, and if there is no then prevailing
exchange rate, Bank may obtain the Alternate Currency from any commercially
reasonable source, in which case Applicant shall pay Bank's cost therefor,
inclusive of all expenses, in United States currency.

                  (c) If no draft is required to be presented under any Credit,
Applicant agrees to pay Bank upon demand and as provided hereinabove any amounts
paid by Bank under any Credit substantially in conformity with the terms of such
credit.

                  (d) All payments to be made to Bank under any Credit or this
Agreement shall be payable in immediately available funds.

         2.       Fees and Costs.

                  Applicant agrees to pay to Bank in connection with each
Credit, on demand, (a) such fees as are customarily charged by Bank for the
issuance, negotiation, amendment and transfer of letters of credit or as have
otherwise been or are otherwise hereafter agreed to by Bank and Applicant, and
all charges and expenses incurred by Bank or its correspondents in connection
with the Creditors or this Agreement, and (b) interest on such charges and
expenses at the rate customarily charged by Bank in like circumstances. If at
any time Bank shall determine that compliance with any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by Bank with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on Bank's capital (or on the capital of any
corporation controlling Bank) as a consequence of Bank's issuance of, or
agreement to issue, a Credit to a level below that which Bank (or such
corporation) could have achieved but for such compliance (taking into
consideration Bank's policies with respect to capital adequacy) by an amount
deemed by Bank to be material, then from time to time, within 15 days after
demand by Bank, Applicant shall pay to Bank such additional amount or amounts as
will compensate Bank (or such corporation) for such reduction, provided that
Bank shall have given notice to Applicant of such amounts and provided further
that Applicant shall have the right, upon such notice, to request that the
beneficiary of any Credit cancel the Credit with written notice, and to obtain a
pro-rata refund from Bank of any fees paid therefor for the period after
cancellation.

         3.       Interest.

                  If for any reason Bank makes payment under a Credit prior to
Bank's receipt of funds from Applicant, Applicant agrees to pay Bank interest at
a rate per annum equal to 3% plus the Prime Rate (as defined below), from the
date Bank makes such payment to the date Applicant reimburses Bank for the
amount of such payment. All computations of interest shall be made by Bank on
the basis of a year of 360 days for the actual number of days elapsed. "Prime
Rate" means the rate of interest announced publicly, from time to time, by the
Marine Midland Bank, N.A. at its offices in New York, New York as its prime rate
and is a base rate for calculating interest on certain loans. Without notice to
any Applicant or any other party, the Prime Rate will change automatically from
time to time as and in the amount by which said Prime Rate shall fluctuate and
any change in the interest rate resulting from a change in the Prime Rate shall
be effective on the date of such change in the Prime Rate.

         4.       Security Interest.

                  (a) As security for the payment of the Indebtedness (as
defined below), Applicant grants to Bank a security interest and a lien in and
on any and all Applicant's property which is or may hereafter be in the
possession or control of Bank in any capacity or of any third party acting on
Bank's behalf, including, without limitation, all deposit and other accounts and
all moneys owed or to be owed by Bank to Applicant and all bills of lading,
instruments, documents of title or other items presented under the Credit and in
and on any and all property shipped under or pursuant to or in connection with
the Credit or in any way relative thereto or to drafts drawn thereunder (whether
or not such documents, goods or other property be released to or upon the order
of the undersigned on trust or bailee receipt or otherwise) and in and on the
proceeds of each and all of the foregoing, until such time as any and all such
Indebtedness has been fully paid and discharged. "Indebtedness" as used in this
Agreement shall mean any and all obligations and other liabilities of Applicant
to Bank under this Agreement or in connection with any Credit, of every kind and
character, and all extensions, renewals and replacements thereof, including,
without limitation, all unpaid accrued interest thereon, and all costs and
expenses payable as herein provided: (i) whether now existing or hereafter
incurred; (ii) whether such indebtedness is from time to time reduced and
thereafter increased, or entirely extinguished and thereafter reincurred; (iii)
whether or not such indebtedness is evidenced by a negotiable or non-negotiable
instrument or any other writing; (iv) whether contingent or matured; and (v)
whether such indebtedness is contracted by Applicant alone or jointly or
severally with another or others.

                  (b) Bank may, at any time and in its sole discretion, require,
as a condition to the issuance of, or the extension of the expiration date of,
any Credit, that Applicant provide to Bank collateral satisfactory to Bank to
secure payment of the Indebtedness. Nothing contained herein shall impair the
right of Bank to decline to issue any requested Credit or to decline to grant
any requested extension of the expiration date of any Credit.

         5.       Other Matters Pertaining to Credits.

                  (a) The users of the Credits shall be deemed Applicant's
agents and Applicant assumes all risk for their acts and omissions.

                  (b) Neither Bank nor any of Bank's correspondents shall assume
any liability to anyone for failure to pay if such failure is due to any legal
or other restriction in force at the time and place of presentment, and
Applicant agrees to indemnify Bank and hold Bank harmless from any consequences
that may arise therefrom. The obligations of Applicant under this Agreement
shall be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances: (i) any lack of validity or
enforceability of any Credit or any other agreement or instrument relating
thereto (collectively the "Related Documents"); (ii) any amendment or waiver of
or any consent to departure from all or any of the Related Documents; (iii) the
existence of any claim, set-off, defense or other right which Applicant may have
at any time against any beneficiary or any transferee of any Credit (or any
persons or entities for whom any such beneficiary or any such transferee may be
acting), Bank or any other person or entity, whether in connection with this
Agreement, the transactions contemplated herein or in the Related Documents or
any unrelated transaction; (iv) any statement or any other document presented
under any Credit proving to be forged, fraudulent, invalid or insufficient in
any respect; (v) payment by Bank under any Credit against presentation of a
draft or certificate which does not comply with the terms of such Credit; or
(vi) any other circumstance of happening whatsoever, whether or not similar to
any of the foregoing.

                  (c) Neither Bank nor Bank's correspondents shall assume any
liability or be responsible for (i) verifying the existence of any act,
condition or statement made by any party in relation to any drawing or
presentment under any Credit or in verifying or passing judgment on the
reasonableness of any statement made by any party in relation to any drawing or
presentment under any Credit; (ii) the form, sufficiency, accuracy, genuineness,
falsification or legal effect of any documents, or of any endorsements thereon,
even if such documents or endorsements should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (iii) failure to give
notice to any party; (iv) any breach of contract between the beneficiary of any
Credit and the Applicant (or between the beneficiary and one or more of the
joint Applicants if there is more than one Applicant); (v) the solvency,
responsibility or relationship to the Property (as defined below), of any party
issuing any documents in connection with the Property, (vi) any delay or loss in
transit, or both, of any messages, letters or documents, or for delay,
mutilation or other errors arising in the transmission of any telecommunication;
(vii) any inaccuracy of any translation or errors in interpretation of technical
terms; or (viii) any error, neglect or default of any of Bank's correspondents.
"Property" as used in this Agreement shall include goods and merchandise (as
well as any and all documents relative thereto), securities, funds, monies
(whether United States currency or otherwise), choses in action and any and all
other forms of property, whether real, personal or mixed, or tangible or
intangible, and any right and interest of Applicant thereon or thereto, that are
subject to a Credit. None of the foregoing events, actions or conditions
described in the preceding sentence shall affect, impair or prevent the vesting
of any of Bank's rights or powers under this Agreement.

                  (d) Without limiting the specific provisions set forth in this
Section 5, Applicant further agrees that any action or omission taken or
suffered by Bank or by any of Bank's correspondents, under or in connection with
any Credit or the relevant drafts, if taken or suffered by Bank in good faith,
shall be binding on Applicant.

                  (e) Applicant agrees that in the event of any increase in the
amount of any Credit, any extension of the time for presentment of drafts, or
any other modification of the terms of any Credit, at the request of the
Applicant, or of any joint Applicant (if there is more than one Applicant)
without notice to the other Applicant or Applicants, this Agreement shall be
binding upon Applicant (and, if there is more than one Applicant, upon such
other Applicants as well) with regard to any such Credit so increased or
otherwise modified, to drafts covered thereby and to any action taken by Bank or
any of Bank's correspondents in accordance with such extension, increase or
other modification.

         6.       Representations and Covenants.

                  (a) Applicant represents and warrants that (i) Applicant is
authorized to enter into this Agreement; (ii) Applicant has obtained all
necessary authorizations, approvals, notices and filings required for Applicant
to enter in this Agreement that copies thereof have been delivered to Bank, and
that such authorizations, approvals, notices and filings remain in full force
and effect; (iii) this Agreement constitutes a legal, valid and binding
obligation of Applicant, enforceable against Applicant in accordance with its
terms; (iv) the execution, delivery and performance by Applicant of this
Agreement does not and will not contravene Applicant's charter, by-laws or other
applicable organization documents or any law or contractual restriction binding
on or affecting Applicant; and (v) any collateral now or hereafter securing the
Indebtedness is and shall be free and clear of any liens, claims or encumbrances
other than the security interest of Bank therein.

                  (b) Applicant will pay to Bank, on demand, all costs and
expenses of every kind paid or incurred by Bank or any of Bank's correspondents
in connection with the Credits of this Agreement, in enforcing this Agreement,
or in realizing upon or protecting any collateral. "Costs and expenses" as used
in the preceding sentence shall include, without limitation, the actual
attorneys' fees incurred by Bank in retaining counsel for advice, suit, appeal,
any insolvency or other proceedings under the Federal Bankruptcy Code or
otherwise, or for any purpose specified in the preceding sentence. Payment of
all sums referred to in this Section 6(b) is secured by all collateral held by
Bank.

                  (c) Upon the occurrence of any event of default hereunder,
Applicant will furnish to Bank such collateral as Bank may from time to time
request as security for the Indebtedness, including, without limitation, cash
collateral in an amount not less than the aggregate undrawn face amount of all
Credits then outstanding, if requested by Bank.

                  (d) Applicant will furnish to Bank any information which Bank
may reasonably request with respect to the financial condition, operations and
properties of Applicant, including, without limitation, with respect to any
financing statement, or like document, or security agreement relating to
Applicant or to any of Applicant's property.

                  (e) Applicant will execute and deliver to Bank such financing
statements, assignments and other documents and do such other things as Bank may
request in furtherance of the creation, perfection and protection of the
security interests granted hereunder in favor of Bank.

                  (f) Applicant represents and warrants that the transactions
covered by the Credits are not prohibited under any laws and regulations
applicable thereto, and that any transfer of moneys covered by the Credits
conforms in every respect with all applicable laws and regulations.

                  (g) Applicant will procure promptly any necessary licenses
relating to any Credit; will comply with all foreign and domestic governmental
and other regulations relating to the Credits; will deliver such evidence of
compliance as Bank may require from time to time; and, unless the Credit
provides that the beneficiary thereunder will insure the Property, will keep the
Property adequately covered by insurance satisfactory to Bank, issued by
insurers acceptable to Bank, and to assign such policies or certificates of
insurance to Bank, or to make the loss or adjustment, if any, payable to Bank,
at Bank's option, and to furnish Bank of demanded with evidence of acceptance by
the insurer of such assignment. If the insurance upon said goods for any reason
is unsatisfactory to Bank, Bank may, at the expense of the Applicant, obtain
insurance satisfactory to Bank.

         7.       Events of Defaults and Remedies.

                  (a) Any of the following events or conditions shall constitute
an event of default hereunder: (i) nonpayment, when due, of principal of or
interest on any Indebtedness, or default by Applicant in the payment or
performance of any obligations, term or conditions of this Agreement or any
other agreement between Applicant and Bank; (ii) death or judicial declaration
of incompetency of Applicant, if an individual; (iii) the filing by or against
Applicant of a request or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as a bankrupt, relief as a debtor or other
relief under the bankruptcy, insolvency or similar laws of the United States or
any state or territory thereof or any foreign jurisdiction, now or hereafter in
effect; (iv) the making of any general assignment by Applicant for the benefit
of creditors; the appointment of a receiver or trustee for Applicant or for any
assets of Applicant, including, without limitation, the appointment of or taking
possession by a "custodian", as defined in the Federal Bankruptcy Code; the
making of any, or sending notice of any intended, bulk sale; or the institution
by or against Applicant of any other type of insolvency proceeding (under the
Federal Bankruptcy Code or otherwise) or of any formal or informal proceeding
for the dissolution or liquidation of settlement of claims against or winding up
of affairs of, Applicant; (v) the sale, assignment, transfer or delivery of all
or substantially all of the assets of Applicant; the cessation by Applicant as a
going business concern, the entry of judgment against Applicant, other than a
judgment for which Applicant is fully insured, if ten days thereafter such
judgment is not satisfied, vacated, bonded or stayed pending appeal, or if
Applicant is generally not paying Applicant's debts as such debts become due;
(vi) the occurrence of a material adverse change in the financial condition,
operations, business, management or prospects of Applicant; (vii) the assertion
by Applicant or any endorser, guarantor or other party of the invalidity or
unenforceability of any term or provision of this Agreement, any Credit or any
guaranty of the Indebtedness or of the invalidity or unenforceability of any
security interest in favor of Bank in assets or interests which purportedly
secure payment of any Indebtedness; (vii) the occurrence of any event described
in Section 7(a)(ii), (iii), (iv), (v) or (vi) hereof with respect to any
endorser, guarantor or any other party liable for, or whose assets or any
interest therein secures, payment of any Indebtedness ("Third Party"), or the
occurrence of any such event with respect to any general partner of Applicant,
if Applicant is a partnership; (ix) if any certificate, statement,
representation, warranty or audit heretofore or hereafter furnished by or on
behalf of Applicant or any Third Party, pursuant to or in connection with this
Agreement, or otherwise (including, without limitation, representations and
warranties contained herein) or as an inducement to Bank to extend any credit to
or to enter into this or any other agreement with Applicant, proves to have been
false in any material respect at the time as of which the facts therein set
forth were stated or certified, or to have omitted any substantial contingent or
unliquidated liability or claim against Applicant or any such Third Party, or,
if upon the date of execution of this Agreement there shall have been any
materially adverse change in any of the facts disclosed by any such certificate,
statement, representation, warranty or audit, which change shall not have been
disclosed in writing to Bank at or prior to the time of such execution; (x)
nonpayment by Applicant when due of any indebtedness for borrowed money owing to
any third party, or the occurrence of any event which could result in
acceleration of payment of any such indebtedness; or (xi) the reorganization,
merger or consolidation of Applicant (or the making of any agreement therefor)
without the prior written consent of Bank.

                  (b) An amount equal to the full undrawn amount of all issued
and unexpired Credits shall become immediately due and payable in immediately
available funds by Applicant to Bank, as cash collateral for such Credits, at
the option of the Bank, upon the happening of any event of default. Upon expiry
of all such Credits, and after application of any amounts paid to Bank pursuant
to the preceding sentence to the obligations of Applicant under this Agreement:
(i) Applicant shall remain liable for any deficiency remaining; and (ii)
provided Applicant's obligations under the Agreement have been irrevocably
satisfied in full and this Agreement terminated, Bank shall refund any surplus
remaining. In the event that any Indebtedness (other than contingent liabilities
constituting the undrawn face amount of issued and unexpired Credits) shall be
outstanding upon the happening of an event of default, such Indebtedness shall
thereupon become and be immediately due and payable without demand or notice of
any kind. For purposes of this Section 7(b), Applicant hereby expressly waives
presentment, demand, protest or further notice of any kind.

         8.       Miscellaneous.

                  (a) Without limiting any other right of Bank, whenever Bank
has the right to declare any Indebtedness to be immediately due and payable or
to declare that cash collateral be delivered to Bank (in either such case,
whether or not it has so declared), Bank at its sole election may set off
against the Indebtedness any and all moneys then or thereafter owed to Applicant
by Bank in any capacity, whether or not the obligation to pay such moneys owed
by Bank is then due, and Bank shall be deemed to have exercised such right of
setoff immediately at the time of such election even though any charge therefor
is made or entered on Bank's records subsequent thereto.

                  (b) Applicant hereby agrees to indemnify Bank against and hold
Bank harmless from any and all claims, damages, losses, liabilities, costs or
expenses (including actual attorneys' fees) which may be incurred by Bank or may
arise or be asserted against Bank in connection with this Agreement or any
Credit, including, without limitation, those incurred as a result of or arising
pursuant to the negligence of Bank (but excluding the gross negligence or
willful misconduct of Bank).

                  (c) No course of dealing between Applicant and Bank and no
delay or omission by Bank in exercising any right or remedy hereunder or with
respect to any Indebtedness shall operate as a waiver thereof or of any other
right or remedy, and no single or partial exercise thereof shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
Bank may remedy any default by Applicant hereunder or with respect to any
Indebtedness in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by Applicant. All of
Bank's rights and remedies hereunder are cumulative.

                  (d) The rights and remedies of Bank hereunder shall, if Bank
so directs, inure to any party acquiring any interest in all or any part of the
Indebtedness or in this Agreement.

                  (e) Bank and Applicant as used herein shall include the heirs,
executors or administrators, or successors or assigns, of those parties;
provided that Applicant may not, without the written consent of Bank, assign any
of its rights or obligations hereunder.

                  (f) If more than one party executes this Agreement, the term
"Applicant" shall include each as well as all of them, and their obligations
hereunder shall be joint and several.

                  (g) The Applicant acknowledges that this Agreement shall not
be binding upon the Bank or become effective until and unless accepted by the
Bank in writing. This Agreement and each Credit shall be subject to the Uniform
Customs and Practice for Documentary Credits, 1983 Revision, International
Chamber of Commerce Publication No. 400 and any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce ("UCP"). The
provisions herein and in each Credit are supplemental to, and not in
substitution of, the UCP. SUBJECT TO THE FOREGOING, THIS AGREEMENT AND ALL
CREDITS ISSUED HEREUNDER SHALL BE DEEMED TO HAVE BEEN NEGOTIATED AND ENTERED
INTO IN, AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS, EXCEPT TO THE EXTENT SUCH LAWS ARE INCONSISTENT WITH THE UCP WHICH
SHALL CONTROL IN THE EVENT OF ANY SUCH INCONSISTENCY.

                  (h) Except as expressly provided in any written agreement or
document which may be hereafter executed and delivered by Bank, Bank shall have
no obligations to issue any Credit or to extend the expiration date of any
Credit, the issuance and extension of any Credit in each case being in Bank's
sole and absolute discretion.

                  (i) The obligations hereunder shall continue in force,
notwithstanding any change in the membership of Applicant, if a partnership,
whether arising from the death or retirement of one or more partners or the
accession of one or more new partners.

                  (j) No modification, recession, waiver, release or amendment
of any provision of this Agreement shall be made, except by a written agreement
subscribed by Applicant and a duly authorized officer of Bank.

                  (k) Captions of the paragraphs of this Agreement are solely
for the convenience of Bank and Applicant, and are not an aid in the 
interpretation of this Agreement.

                  (l) Any notice or demand to be given hereunder shall be duly
given if delivered or mailed to the Company or the Bank at the address specified
at the beginning of this Agreement and shall be deemed effective, if delivered,
upon delivery, and, if mailed, upon deposit postage paid in an official
depository maintained by the United States Postal Service for the collection of
mail.

                  (m) Applicant agrees that all Credits issued under this
Agreement shall be irrevocable.

                  (n) This Agreement together with all related documents
executed substantially contemporaneously with this agreement together
constitutes a written loan agreement and the final agreement among the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements. There are no unwritten oral agreements among the parties.

                  (o) CONSENT TO JURISDICTION, THE APPLICANT IRREVOCABLY AGREES
THAT, SUBJECT TO THE BANK'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OR THE
CREDITS SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF NEW YORK,
STATE OF NEW YORK, THE APPLICANT HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION
OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUCH CITY AND STATE AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THE APPLICANT AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO THE
APPLICANT AT THE ADDRESS SPECIFIED ABOVE OR IN ANY OTHER MANNER PERMITTED BY
LAW. THE APPLICANT HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT AGAINST THE APPLICANT BY THE BANK IN ACCORDANCE
WITH THIS PARAGRAPH.






                  (p) WAIVER OF JURY TRIAL. THE APPLICANT AND THE BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR ANY OF THE CREDITS OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE CREDITS, AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE
APPLICANT REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF
ANY LITIGATION, SEEK TO ENFORCE THIS WAIVER OF JURY TRIAL. THE APPLICANT
ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT IN
RELIANCE UPON, AMONG OTHER THINGS THE PROVISIONS OF THIS PARAGRAPH.

                                THE TALBOTS, INC.
                                APPLICANT

                                175 Beal Street, Hingham, MA 02043
                                ADDRESS

                                By:      /s/ Edward L. Larsen
                                         AUTHORIZED SIGNATURE(S)


                                         JOINT APPLICANT (if any)


                                ADDRESS

                                By:
                                         AUTHORIZED SIGNATURE(S)
ACCEPTED:
THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED


By:                                          Dated:   5/15/96





                  AUTHORIZATION AND AGREEMENT OF ACCOUNT PARTY


To:      THE HONGKONG AND SHANGHAI BANKING
         CORPORATION LIMITED (Bank)


We join in the request to Bank to issue the Credits described in the above
Agreement (Credit), naming us as Account Party. In consideration thereof, we
irrevocably agree that: (i) the above Applicant has the sole right to give
instructions and make agreements and amendments with respect to the foregoing
application, the Credits and the disposition of documents; (ii) we shall have no
right, claim, set off or defense against Bank or Bank's correspondents
respecting matter arising in connection therewith; and (iii) we shall be jointly
and severally liable with Applicant for all obligations owing to Bank in
connection with the foregoing application, the agreement executed by Applicant
with respect thereto, and the Credits. We agree that Applicant is authorized to
assign or transfer to Bank all or any part of our obligations arising in
connection with this transaction and any security therefor. Upon such assignment
or transfer, Bank will be vested with all power and rights in respect of the
obligations and security transferred or assigned to Bank.



                                                     By:
                                                     THE TALBOTS, INC.







                           HEXAGON CUSTOMER AGREEMENT


Customer:                  Talbots (the "Customer")
Registered Address:        175 Beal Street
                           Hingham, Massachusetts 02043


Hexagon Services are provided by The Hongkong and Shanghai Banking Corporation
Limited (the "Bank") to the Customer on the following terms and conditions:

In this Agreement (which expression includes the Hexagon Customer Guide and
other Hexagon documentation referenced herein) the following definitions shall
apply:

Customer Instruction:      any request or instruction to the Bank effected
                           through Hexagon by use of a Password.

Hexagon :                  the Hongkong Bank Group's computer-controlled Global
                           Electronic Financial Services system.

Hexagon Series:            any global electronic financial service using Hexagon
                           and ancillary services such as installation, training
                           and maintenance services provided by the Bank from 
                           time to time to the Customer

Hexagon Customer Guide:    the Customer Guide issued by the Bank at the time the
                           Customer first subscribes to the Hexagon Services and
                           any revisions thereto which the Bank advises to the
                           Customer from time to time.

Institution:               any branch of the Bank or any company which is a
                           subsidiary or an associate of the Bank or any branch
                           thereof or any other financial institution or company
                           so designated by the Customer from time to time.

Password:                  any confidential password, code or number, whether 
                           issued to or adopted by the Customer (or any of the
                           Customer's representatives), which may be used to
                           access Hexagon or execute a Customer Instruction.

1.       The Customer agrees to follow the procedures and to observe the terms
         and conditions and restrictions in relation to the Hexagon Services set
         out in the Hexagon Customer Guide (the text of which the Customer
         acknowledges has been advised to the Customer by the Bank). The
         Customer acknowledges that any of the Hexagon Services for which
         compliance with conditions precedent is required in the Hexagon
         Customer Guide or otherwise (including the signing of additional
         documentation, whether by the Customer or by any third party, or the
         giving of further instructions by the Customer through Hexagon) shall
         not be available to the Customer prior to such compliance.

2.       The Customer agrees to pay the Bank's scale of charges for the
         provision of Hexagon Services as advised to the Customer by the Bank.
         The Bank shall be entitled to vary such charges on thirty (30) days'
         notice to the Customer.

3.       The Customer shall be responsible for all Customer Instructions.

4.       The  Bank  shall  be  entitled  but  not  obliged  to  accept  Customer
         Instructions as instructions which have been properly authorized by the
         Customer,  notwithstanding  that  such  instructions  conflict  or  may
         conflict  with  or  are  in  any  way   inconsistent   with  any  other
         instructions  received under any other mandate given by the Customer to
         the Bank relating to any of the Customer's accounts.  The Bank is under
         no  obligation  to cancel or amend any  payment or other  transactional
         instruction  after it has been  transmitted to the Bank.  However,  the
         Bank  shall  use its  reasonable  efforts  to act on a  request  by the
         Customer  for   cancellation   or  amendment  of  a  payment  or  other
         transactional  instruction  prior  to  the  Bank's  execution  of  such
         instruction,  but the Bank shall have no liability if such cancellation
         or amendment is not effected.

5.       The Customer agrees that it is the Customer's responsibility to
         establish and maintain the Management Control features and security
         procedures described in the Hexagon Customer Guide. The Customer
         confirms that such features and procedures together with Hexagon's
         encryption system which enciphers information from the Customer's
         computer to Hexagon are acceptable security procedures. The Customer
         shall ensure that security measures within the Customer's control are
         both adequate and properly maintained. The Customer agrees that the
         Bank may accept any Customer Instruction as authentic and properly
         authorized and the Bank shall be under no obligation to investigate the
         authority of persons effecting Customer Instructions.

6.       The Customer undertakes to keep all Passwords strictly confidential at
         all times. The Customer will be responsible for all transactions
         effected through Hexagon by use of any Password. However, the Customer
         shall not be responsible for any unauthorized transaction effected by
         use of a Password after the Bank has received written notice from the
         Customer of unauthorized disclosure or use of such Password except to
         the extent that an unauthorized transaction is attributable to the
         customer's default, including a failure to maintain adequate security
         measures. The Customer undertakes to notify the Bank immediately of any
         known or suspected unauthorized access to Hexagon or unauthorized
         transactions.

7.       The Bank grants the Customer a non-transferable  non-exclusive  license
         to use the Hexagon software and  documentation,,  including the Hexagon
         Customer Guide,  and any revisions  thereof provided by the Bank to the
         Customer in connection  with Hexagon ("the "Hexagon  Materials") on the
         computer  equipment selected by the Customer to access Hexagon only for
         the purposes  described  in the Hexagon  Customer  Guide.  The Customer
         shall be responsible for such equipment and related transmission links.
         The Customer shall keep the Hexagon Materials strictly  confidential at
         all  times  and  shall not copy  such  Materials,  except  the  Hexagon
         software for  security  purposes,  or allow any other person  access to
         them without the Bank's prior written  consent.  The Hexagon  Materials
         and all copies thereof shall remain the exclusive  property of the Bank
         at all times.

8.       The Bank warrants that the Hexagon software will conform at the date of
         supply in all material respects with the current specifications in the
         Hexagon Customer Guide, provided the Hexagon software is used properly.
         The aforegoing warranty is in place of and to the exclusion of any
         condition or warranty, express implied or otherwise in respect of the
         fitness, suitability or performance of Hexagon, the Hexagon Services or
         the Hexagon Materials. The Bank does not warrant that the operation of
         Hexagon will be uninterrupted or error free.

9.       The Customer hereby  appoints the Bank as the Customer's  agent for the
         purpose of:

         (a) instructing on the Customer's behalf any relevant Institution to
         transmit or otherwise communicate to the Bank and/or Hexagon any
         information concerning the Customer and the Customer's account(s)
         (whether now in existence or opened hereafter) with any such
         Institution;

         (b) opening, continuing and conducting accounts with any Institution in
         order to give effect to any Customer Instruction, and the Customer
         agrees that any such account will be opened and conducted on such terms
         and conditions as that Institution shall reasonably consider
         appropriate; and

         (c) agreeing on the Customer's behalf with any relevant Institution
         that the provisions of Clauses 9 to 13 inclusive of this Agreement
         shall apply as between the Customer and such Institution (references in
         these Clauses to the Bank being deemed to be references to such
         Institution and references in these clauses to Hexagon Services being
         deemed to include references to any similar services provided by such
         Institution).

10.      The Customer authorizes the Bank to provide third parties with such
         information relating to the Customer and the Customer's account(s) as
         may, in the Bank's reasonable opinion, be necessary in order to give
         effect to a Customer Instruction or in order to comply with the order
         of any court, governmental agency or lawful authority in any
         jurisdiction.

11.      The Customer acknowledges that information concerning the Customer and
         the Customer's account(s) may be transmitted to or through and/or
         stored in various countries or states. The Customer authorizes such
         transmission and/or storage as the Bank or any Institution shall
         reasonably consider necessary or appropriate in the provision of
         Hexagon Services.

12.      The Customer agrees that the Bank shall not be liable for any delay or
         failure to provide any Hexagon Services which is attributable (whether
         wholly or partially) to any cause beyond the Bank's control including
         any equipment, system or transmission link malfunction or failure.

13.      Under no circumstances shall the Bank be liable to the Customer
         (whether in contract, tort, including negligence, strict liability or
         otherwise) for any indirect or consequential loss including without
         limitation loss of profits or contracts (whether foreseeable by the
         Bank or not) arising out of or related to the Customer's use of
         Hexagon.

14.      This Agreement constitutes the entire agreement between the Bank and
         the Customer relating to the use of Hexagon, but any other agreement(s)
         between the parties and/or mandate relating to the conduct of the
         Customer's account(s) with the Bank by means other than Hexagon shall
         be unaffected. Each of the provisions of this Agreement is severable
         and distinct from the others and, if one or more of them is or becomes
         illegal, invalid or unenforceable, the remainder shall not be affected
         in any way.

15.      The Bank reserves the right to change and/or add to the terms and
         conditions contained in this Agreement, including the contents of the
         Hexagon Customer Guide, on thirty (30) days' notice to the Customer. If
         the Customer objects to any change, the Customer may terminate this
         Agreement by giving written notice prior to the effective date of the
         change.

16.      Either party may terminate this Agreement on thirty (30) days' notice
         to the other provided that the Bank shall be entitled to terminate this
         Agreement immediately in the event of a material breach of it by the
         Customer or upon closure of the Customer's account(s) with the Bank.
         Upon termination for any reason the Customer's license to use the
         Hexagon materials shall cease forthwith and the Customer shall
         immediately return to the Bank the Hexagon Materials, including all
         copies thereof, erase the contents of any Hexagon software held on hard
         or floppy disc and destroy all Passwords.

17.      Any notice or communication to be given pursuant to this Agreement
         shall be sufficient if given in writing and personally delivered or
         mailed by certified or registered mail, postage prepaid, to the address
         of the other party as follows:

         If to the Bank:   The Hongkong and Shanghai Banking Corporation Limited
                           Group Hexagon Services
                           140 Broadway, 10th Floor
                           New York, NY 10005

         If to the Customer:  Talbots
                              175 Beal Street
                              Hingham, Massachusetts 02043

18.      The Customer acknowledges that the use of Hexagon in relation to
         Customer accounts (if any) in certain countries or states is subject to
         special supplementary conditions. The Customer hereby agrees to be
         bound by such supplementary conditions which are detailed from time to
         time in the Hexagon Customer Guide and are otherwise made available on
         request.

19.      This Agreement shall be governed by and construed in accordance with
         the laws of New York State and the parties hereto submit to the
         non-exclusive jurisdiction of the Courts of New York State.

Signed for and on behalf of the Customer:

By:      EDWARD L. LARSEN                            /s/ Edward L. Larsen
         (full name in capitals)                          (signature)
Title:   Senior Vice President Finance & CFO
Witness: SANDY F. KATZ                               /s/ Sandy F. Katz
         (full name in capitals)                     (signature of witness)
Title:   Vice President Audit & Control
Address: 175 Beal Street
                  Hingham, MA 02043
Dated:            May 15, 1996