EXHIBIT 4.2 LETTER OF CREDIT AGREEMENT

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                                   EXHIBIT 4.2

                                                            Date: March 29, 2004

R. G. BARRY CORPORATION

13405 Yarmouth Road

Pickerington, Ohio 43147

                         Re: LETTER OF CREDIT AGREEMENT

Ladies and Gentlemen:

         From time to time, in order to assist you in establishing or opening

Letters of Credit with a bank or trust company (herein the "Bank") to cover the

purchase of goods and inventory, you may request us to join in the applications

for such Letters of Credit, and/or guarantee payment or performance of such

Letters and any drafts or acceptances thereunder, thereby lending our credit to

you. These arrangements shall be handled by us subject to the terms and

conditions set forth below.

A.        Our assistance in this matter shall at all times and in all respects be

         in our sole discretion and as provided in the factoring agreement

         entered into between us of even date (the "Agreement"). The amount and

          extent of the Letters of Credit and the terms and conditions thereof

         and of any drafts or acceptances thereunder, shall in all respects be

         determined solely by us and shall be subject to change, modification

         and revision by us, at any time and from time to time. All capitalized

         terms not defined herein shall have the meaning given such terms in the

         Agreement.

B.        Any indebtedness, liability or obligation of any sort whatsoever,

         however arising, whether present or future, fixed or contingent,

         secured or unsecured, due or to become due, paid or incurred, arising

         or incurred in connection with any Letters of Credit, guarantees,

         drafts or acceptances thereunder or otherwise (herein the

         "Obligations") shall be incurred solely as an accommodation to you and

         for your account. Obligations shall include, without being limited to,

         all amounts due or which may become due under said Letters of Credit,

          guarantees or any drafts or acceptances thereunder, all amounts charged

         or chargeable to you or to us by the Bank, other financial institution

         or correspondent bank which opens, issues or is involved with such

         Letter of Credit, any other bank charges; fees and commissions; duties

         and taxes; costs of insurance; all such other charges and expenses

         which may pertain either directly or indirectly to such Letters of

         Credit, drafts, acceptances, guarantees or to the goods or documents

         relating thereto, and our charges as herein provided. We shall have the

         right, at any time and without notice to you, to charge your account on

         our books with the amount of any and all such Obligations when due. Any

         debit balance which may exist at any time or from time to time in your

         account shall be repayable to us on demand and shall incur interest at

         the rate provided in the Agreement. All Obligations are to be repaid to

         us solely in United States currency.

C.        As security for the prompt payment in full of all of your present and

         future indebtedness or obligations whether under Agreement between us,

         any other agreement between us or otherwise, as well as to secure the

         payment in full of all Obligations referred to herein, you hereby

         pledge and grant to us a continuing general lien upon and security

         interest in the following "Collateral", whether now owned or hereafter

         acquired by you, wherever located, whether in transit or not: all

         presently owned and hereafter acquired: (a) warehouse receipts, bills

         of lading, shipping documents, documents of title, chattel paper and

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          instruments, all whether negotiable or not; (b) merchandise, inventory

         and goods which relate to any of the foregoing or which are purchased

         from suppliers located outside of the United States or its territories

         or which relate to letters of credit opened through or with our

         assistance (whether for purchases from domestic or foreign suppliers),

         and all additions thereto, substitutions therefor and replacements

         thereof, in all stages of manufacture, process or production--from raw

         materials through work-in-process to finished goods, together with all

         goods and materials used or usable in manufacturing, processing,

         packaging or shipping same, all wherever located and whether in transit

         or not; and (c) cash and non-cash proceeds of any and all of the

         foregoing, of whatever sort and however arising.

D.        You warrant and represent that we have and shall have at all times a

         valid and effective first and paramount lien on and security interest

         in all said Collateral and that your title to said Collateral is

         unencumbered by any other liens except for Permitted Liens. You also

         warrant and represent that all sales of any goods or inventory covered

         hereby shall be made by you in the ordinary course of business and the

         accounts arising from such sales and proceeds thereof shall be

         transferred and assigned to us pursuant to the Agreement; and you

         confirm that our lien and security interest extends and attaches to

         those accounts and proceeds. Further, you warrant and represent that

         all Letters of Credit are being opened to cover actual purchases of

         goods and inventory solely for your account, and said goods will not be

         sold or transferred, other than as herein provided, without our

         specific prior written consent. You agree to comply with the

         requirements of any and all laws in order to grant to us and maintain

         in our favor, a valid first lien upon and security interest in the

         Collateral subject to Permitted Liens, and to do whatever we may

         request from time to time in order to effect the purposes of this

         Agreement, including, but without limitation, filing financing

         statements, keeping records and making reports on the Collateral to us,

         advising us of the location of all Collateral, marking, labeling and

         segregating such Collateral and obtaining any necessary agreements or

         waivers with regard to the Collateral. To the extent permitted by

         applicable law, you irrevocably authorize us to file financing

         statements and all amendments and continuations with respect thereto,

         all in order to create, perfect or maintain our security interest in

         the Collateral, and you hereby ratify and confirm any and all financing

         statements, amendments and continuations with respect thereto

         heretofore and hereafter filed by us pursuant to the foregoing

         authorization.

E.        You unconditionally indemnify us and hold us harmless from any and all

         loss, claim or liability arising from any transactions or occurrences

         relating to Letters of Credit established or opened for your account,

         the Collateral relating thereto and any drafts or acceptances

         thereunder (collectively "Losses") and all Obligations hereunder,

         including any such losses due to any action taken by any Bank, other

         than Losses arising from or relating to the gross negligence or willful

         misconduct of such Bank or us. You further agree to hold us harmless

         for any errors or omission, whether caused by us, by the Bank or

         otherwise. Your unconditional obligation to us hereunder shall not be

         modified or diminished for any reason or in any manner whatsoever. You

         agree that any charges made to us for your account by the Bank shall be

         c