SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 10, 2003
         --------------------------------------------------------------

                              HANOVER DIRECT, INC.
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               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

                                     1-08056
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                            (COMMISSION FILE NUMBER)

                                              
                DELAWARE                                  13-0853260
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      (STATE OR OTHER JURISDICTION                     (I.R.S. EMPLOYER
            OF INCORPORATION)                       IDENTIFICATION NUMBER)

             115 RIVER ROAD
          EDGEWATER, NEW JERSEY                              07020
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          (ADDRESS OF PRINCIPAL                           (ZIP CODE)
           EXECUTIVE OFFICES)




       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 863-7300
                               -------------------


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          (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

ITEM 9. REGULATION FD DISCLOSURE.

Hanover Direct, Inc. (the "Company") held a conference call on Monday, November
10, 2003 at 3:00 p.m. Eastern Time to review the fiscal 2003 third quarter
operating results with participants. The following is an unofficial transcript
of the conference call:

OPERATOR: Good afternoon and welcome to the Hanover Direct Third Quarter
Operating Results teleconference. At this time all lines have been placed on a
listen-only mode and the floor will be open for questions following the
presentation.

At this time it is my pleasure to turn the floor over to your host, Miss Sarah
Hewitt. Ma'am, you may begin.

SARAH HEWITT: Good afternoon. In a few moments Tom Shull, Hanover's Chief
Executive Officer, and Ed Lambert, Hanover's Chief Financial Officer, will
discuss the Company's fiscal 2003 third quarter operating results and answer any
questions you may have.

Such discussion, as well as the answers to your questions, may include a number
of forward-looking statements. In accordance with the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995, please be advised that the
Company's actual results could differ materially from those forward-looking
statements. Additional information that could cause actual results to differ
materially is contained under the sub-heading "Cautionary Statements" in the
management's discussion and analysis section of the Company's Annual Report on
Form 10-K for the fiscal year ended December 28th, 2002, and Quarterly Report on
Form 10-Q for the third quarter ended September 27th, 2003, as filed with the
SEC which may be obtained from the public reference facilities maintained by
the SEC in Washington, DC and at the regional offices of the SEC in New York
City and Chicago, Illinois, or from the SEC's website located at www.sec.gov as
well as from the offices of the American Stock Exchange in New York City.
Hanover Direct always tries to provide the maximum information possible to its
shareholders and the investment public consistent with its legal obligations.
In light of its status as a public company, the need to avoid selective
disclosures and SEC restrictions, including regulations such as Regulation FD,
company management does not generally respond to requests for material
non-public information. If one of your questions calls for the disclosure of
material non-public information, Tom and Ed may not be able to respond to it in
this call. We hope you understand. Ed.

ED LAMBERT, HANOVER DIRECT: Thank you very much Sarah. This is Ed Lambert, Chief
Financial Officer of Hanover Direct, and I'd like to welcome everyone to the
conference call discussing our third quarter results and nine-month year-to-date
results. We have a number of important recent developments to discuss with you.
We'll be covering three broad areas. First, Tom Shull, our Chairman and Chief
Executive Officer, will brief you on a Memorandum of Understanding that has been
reached with Chelsey Capital. Secondly, I will cover the nine-month year-to-date
financial results, and then third, it's our pleasure to introduce to you Charles
Blue, who will be Chief Financial Officer for Hanover Direct starting tomorrow,
and he will give you an outlook for the Company going forward.

So first, let's talk about the Memorandum of Understanding that was released in
an 8-K this morning. Tom.

TOM SHULL, HANOVER DIRECT: Good afternoon. The Memorandum of Understanding that
was signed this morning and outlined in today's 8-K and 10-Q filings has been
approved by the Company's Transactions Committee and has received a preliminary
positive fairness opinion from Houlihan Lokey, the financial advisors to the
Transactions Committee. The MOU represents the culmination of negotiations from
August 7th, which was when we received Chelsey's proposal, and the September
18th HDI counterproposal among the Company's

Transactions Committee, Regan Partners and Chelsey Direct.

It exchanges, as each of you probably know who have read it, the current
Series B Preferred Stock for new Series C Stock and new common shares. The 81.9
million in new common stock will give Chelsey 51% control of the equity and is
roughly equal to the shares and voting control that Richemont had under the
Series A. The Series C Stock at $56.5 million, a savings to common share
holders of potentially $90 million should the Series C be retired before 2006,
represents what we believe to be a major opportunity of a significant outcome
for all shareholders. Starting in January 2006, a 6% dividend is due on the
remaining Series C Preferred Stock. This dividend can be in cash or, at a 1%
higher rate, it can be accrued. The Series C is due in January of 2009, giving
the Company more time than under the Series B. As you may recall, in the Series
B, it was due and payable in August of 2005.

There are two key milestone dates that we are mindful of... the Company is
mindful of over the course of the next 30 to 40 days. The Recapitalization
Agreement must be signed by November 30th or a transaction fee of $1 million is
due to Chelsey. The final closing is to occur by December 17th, or the MOU is no
longer valid unless all parties continue to negotiate in good faith.

There are several governance points which were, over the course of the last 4
to 6 weeks, negotiated between the two parties, and we believe, collectively,
and I don't want to represent Chelsey's view, but certainly it is the view that
these are significant provisions that are in the best interests of all the
shareholders, both the preferred and the common. First, the agreement has the
support of a majority of common shares in Chelsey and Regan Partners. Secondly,
the recapitalization will need approval of the Transactions Committee, Hanover
Direct's Board of Directors, Congress Financial, and possibly the American
Stock Exchange. Upon execution of the Recapitalization Agreement, the Board
will reconstitute to eight members, including four appointed by Chelsey. Under
Rule 14f-1 of the Securities Exchange Act of 1934, the Company will file with
the SEC as soon as possible a statement regarding a change in majority of
directors and a change in control. Ten days after the filing and mailing of
this statement, the Board will increase to nine with Chelsey appointing the
ninth member. At this stage or actually it's fair to say that even at the
beginning of the process, we will actively market all non-core assets to retire
the Series C and further align the shareholders' interests. Examples of
non-core assets would be Silhouettes, Gump's, and International Male. The new
Transactions Committee -- to be chaired by Marty Edelman, and the other two
members of that committee will be David Brown and Basil Regan -- will review
these potential transactions and decide unanimously as to whether or not to
proceed with a sale of those assets. The intent here is to quickly, but in an
orderly way, reduce the new Series C so that the interests of the preferred and
common are completely aligned in a reasonably short period of time.

In addition, the Recapitalization Agreement contemplates full general releases
between the Company and Chelsey. Just finally, I would urge everyone to read the
complete MOU in today's 8-K filing and try to become as familiar as possible
with the provisions. It's a complex Memorandum of Understanding, but we believe
is in the best interests of all the shareholders. Ed.

ED LAMBERT: Thank you very much Tom. Let me now briefly take you to the
Company's financial results. I'll focus on the nine-month year-to-date results.
The internet continued its strong growth pattern that we have seen over the
last year. We grew by $79 million in net revenues for the internet for the
first nine months. That is 28% above prior year, and now we have reached the
stage where the internet comprises 28% of our revenue base. Total revenues
reached $305 million for the nine months year-to-date. This is 7-1/2% below
prior year. This is consistent with the trend that we have seen over the last
several quarters where internet growth is strong, catalogue has been in decline
due to not only the Company cutting back in terms of circulation to focus on
profitable circulation, but also softness in the demand for our products, so as
a result the overall demand declined 7-1/2% year-over-year.

Despite this decline in the top line, operating income continues to improve. For
the first nine months, we have achieved a positive $1.5 million in operating
income. That's $1.9 million above the prior year. This is due to over $5 million
in reductions in general and administrative expense and a reduction over a
million dollars in regard to special charges, and this is a confirmation that
the operational turn-around in the last few years has continued into this year,
so despite the demand being down and the loss of margin from that, the
reductions in G&A and special charges have allowed us to increase the operating
income significantly. In fact, if you look at the third quarter alone, operating
income increased by $2.8 million over the prior year, so we've achieved actually
close to break even for the third quarter and, given this is our slowest quarter
from a profit and demand standpoint, that's a significant milestone.

Net income, however, showed us a loss of $15.8 million for the nine months. This
is a decrease of $11.6 million over the prior year, but this is not due to
operations. This is due to some significant one-time accounting charge that I'd
like to take you through. First off, there was a write-off of over $11 million
in the deferred tax asset that has been on the books of the Company for over
ten years, and, based on consultations with KPMG, we have decided to write it
off, and therefore we took that $11 million charge this quarter. In addition, we
have increased interest expense of $4.5 million that's due to the implementation
of the new FAS 150 guidelines. This was covered in the last quarter's 10-Q, but
starting in July of this year, based on the guidelines of FAS 150, the Series B
Preferred Stock was to be classified on a prospective basis as debt rather than
equity, therefore the quarterly accretion debt we have currently in the Series B
stock has to be treated as an interest expense, so as a result, because of the
deferred tax asset issue and because of the FAS150 conversion of the Series B
from equity to debt, that's why you had a significant increase in terms of the
net loss, and that one-time event overcame the increase that we saw... the
positive increase we saw with regard to operating income.

Now you note that I've been speaking only in terms of profit and income rather
than EBITDA, which we have done in the past. As you know, in our 10-Q's our
financial statements focus on  GAAP terms, and that's why I focused on
operating income, therefore we will not find EBITDA in this press release or in
the 10-Q, but I should point out because it's important for our bank covenant
purposes, which continue to measure us in terms of our performance on EBITDA.
It's important to point out that for the first nine months of this year, we
continued to exceed plan in terms of our EBITDA and are significantly ahead of
prior year and significantly ahead of covenants.

Now with that summary, what I'd like to do, it's my pleasure to introduce to
everyone Charles Blue. Charles has served the Company the last several years as
VP of Finance and it's been a pleasure to work with him. I am stepping down as
released in our press release on last Monday. We've reached an important
milestone where we're completed in terms of operational turnover, and then with
completion of this MOU, we're significantly looking at sort of a balance sheet
restructuring and recapitalization of the firm. Since I've been commuting weekly
or every other week from Seattle, it's an important juncture for me to step
down. We also need to restructure our corporate center, which is why what we're
doing is eliminating Charles' position and elevating him to Chief Financial
Officer. But again, it's my pleasure to introduce Charles.

TOM SHULL: This is Tom Shull again. Before we hear from Charles, I wanted to
thank Ed for his outstanding leadership over the course of the last two years.
Clearly, we've gone through a very difficult time, both in terms of the
operational turn-around and in the sense, more complex issues as it relates to
the Sarbanes-Oxley, the new environment, and we comply fully and consistently
thanks in most measures to Ed's leadership and so I want to personally thank him
for what he's done for the Company.

ED LAMBERT: Thank you. Again, it's been an opportunity to serve the entire
management team. It's been a real pleasure. Charles, why don't you speak?

CHARLES BLUE: Thank you, Ed. In terms of an outlook for the balance of the year,
we expect to still be in the range of $12 to 14 million of EBITDA per our
previous guidance; however, given the softness in demand, we are expecting that
we will be at the low end of that range, around the $12 million mark. This
excludes the impact from the recapitalization and possible transactions
involving non-core assets. As Ed mentioned previously, that $12 million to $14
million range will still be significantly above our covenants at year end. And
with that I'd like to turn it back over to Ed.

ED LAMBERT: Okay. Thank you very much. Marisha, with that we'd like to open to
questions.

OPERATOR: Thank you. The floor is now open for questions. If you have a
question, please press the number 1 followed by 4 on your touchtone phone. If
at any point your question has been answered, you may remove yourself from the
queue by pressing the pound key. Questions will be taken in the order in which
they are received. We do ask that while you pose your question that you pick up
your handset to provide the best sound quality. Please hold while we poll for
questions.

Thank you. Our first question is coming from Matthew Brand of Performance
Capital Group.

MATTHEW BRAND, PERFORMANCE CAPITAL GROUP: Hello guys.

SPEAKERS: Good afternoon.

MATTHEW BRAND: Questions regarding the divestiture of non-core assets -- you
mentioned three different units. Do we have any idea how much money we might
raise here? If we're not successful, what are our future needs? Can you touch
on that topic in general?

TOM SHULL: Obviously we can't disclose at this time what we would expect to get
for those assets, but we are contemplating a significant redemption...for the
new Series C. We, as you know, had anticipated selling non-core assets before.
Opportunistically, I think, was the word we used in several of the calls. We
think it's at a point in time with the market beginning to recover, the M&A
market, as well as consumer confidence, that we think the window of opportunity
is much better than it has been to sell non-core assets in order to get
significant value. And I also want to mention that now that this Series C, or I
should say, the Preferred is down $56 million, then clearly we can make a
major... we can make real inroads to paying that off whereas when it was at
$112 million, it would have been problematic, and that's very important to
understand, so what this does for us, this transaction with Chelsey, is give us
an opportunity to sell non-core assets in a way that significantly eliminates
the overhang of the preferred. I should mention that all of this is going to
require the Transactions Committee, the new Transactions Committee, to approve
these transactions, and then we'll have independent advice of financial
advisors and deliberations as well as legal advisors, so we would anticipate a
process that clearly is intended to represent the interests of all
shareholders, and at the same time, Chelsey will be involved through their
designee, Martin Edelman who also will be on the Board, so they'll have the
ability to all of the transactions that are being proposed.

MATTHEW BRAND: Thank you very much.

TOM SHULL: Thanks Matt.

OPERATOR: Thank you. Our next question is coming from David Smith of Smith
Capital.

DAVID SMITH, SMITH CAPITAL: Hello gents, how are you?

TOM SHULL: Hello David. Very well thanks.

DAVID SMITH: Well, okay. How about giving me... tell me. Do you think you have a
brand problem because of the slow down in sales in this quarter when we had a
7.2% increase in GNP and you're down 8 or 9% in sales?

TOM SHULL: I think that I'd look at a couple things. First, as you remember, we
do have an issue with regard to scale and focus with a number of our brands, so
I wouldn't say it's a brand equity problem as much as it is scale and focus. We
strongly believe that The Company Store does have, you know, scale and focus,
not as much as we'd like but certainly more so than the other brands and that's
why, as we said for many months now, the emphasis in terms of resources and
focus needs to be on The Company Store as a brand and clearly that has continued
to perform well and we're particularly enthused by the prospect of the
relationship with Amazon, although we haven't seen significant results yet. Once
the promotional schedule for Amazon comes out in terms of its home ad, we
strongly believe the fourth quarter will be very, very strong for The Company
Store, so for us it's a function of the fact that The Company Store is where our
biggest opportunity is and that's why we're contemplating... the other reason
why we're contemplating sale of non-core assets in addition to being able to
redeem the new Series C Preferred is that we, as we've said for quite some time,
we're not confident that we can build the scale nor provide the right focus in
those non-core brands and they in many cases are likely to be better off in
terms of growth and building of value with other strategic players.

DAVID SMITH: To go along with that, how about giving us then a strategy as
you're going forward as how you're going to actually grow the Company now? I
presume you'll admit you're at bare bones now from a cost and expense point of
view and that some sort of growth from here would bring in some operating
leverage. What's the strategy going forward now?

TOM SHULL: Right, well first of all, we look forward to Chelsey Capital joining
the Board, a very talented group of business men who will contribute we believe
significantly to formulating our strategy going forward. That being said, we
don't anticipate a significant departure from what I just outlined as our
strategy which is to focus on The Company Store. It is my belief, and I've said
this for quite some time, that the internet is still where the opportunity lies.
Had we, for example, circulated at the levels that we did in 2000 in
Domestications, we would have lost this year alone another $10 million of
EBITDA, a negative $10 million hit, so it's clear that our circulation strategy
in the past, where we over-circulated and as a result lost money in the
individual brands, was a flawed strategy, so we're hoping that prospecting will
recover somewhat as the consumer confidence continues to recover, but it's
unlikely that prospecting will get back to where it was in 1999 and 2000 where
it had an extremely positive impact on our top line, so therefore much of what
we're going to do going forward will be with our search engines, revamping our
internet sites, our affiliate programs on the internet, our Amazon partnership,
things I've outlined before... that already had a significant impact. I mean,
with emails alone, we double and re-double, and re-double yet again, our email
distribution, and the impact there has been nothing short of phenomenal.
Unfortunately, the number of names via email is still a fairly small, a fairly
modest number, but it keeps doubling all the time and over time, as we said, in
the year 2005, we will cross over in terms of being over 50% internet and at
that point were we to continue even a reasonably modest growth rate on the
internet, it's fair to say that our profitability in 2005 once a lot of the
overhang of a previous G&A structure is gone, we should see a very profitable
year in 2005. We still have some of overhang of leases and offices leases, IT
leases, those kinds of things that we're working off in 2004, but it is fair to
say that 2005 is when we should have a significantly better year in terms of
profitability.

DAVID SMITH: And one final thing. On the internet I saw the growth was modest
compared to the past quarter-over-quarter. Is there an explanation for that?

ED LAMBERT: Well, it certainly is a little bit less than we saw in the second
quarter, but I would never call 28% growth modest. I think Charles has bought up
the point that some of these things are anniversary from year-to-year, and so it
may be that there are significant steps taken in the third quarter of last year
related to upgrades of websites and that sort of thing that might account for
why this quarter's growth was a little bit less than what we had in the second
quarter.

TOM SHULL: David, I also want to address another part of your question which was
the 7.2%... you mentioned 7.2% economic growth. I'm not sure it completely
translates yet to direct marketing. It is starting to translate. When I say
starting to translate to retailers, although if you look at retailers that we
compete with like a JC Penny we still see very much sort of lack luster
performance, and certainly with direct marketing companies, we're very
competitive in terms of performance, so unfortunately the way we have to look at
it is how do our direct competitors perform and where are we in that ranking,
and I think I would say we're solidly in the middle or higher. Clearly as you
look at high end retailers, for example, are doing much better as are -- on the
flip side of that -- as are some of the discounters on the lower end, but the
core competitors that we compete with have not demonstrated yet a significant
upswing in performance.

DAVID SMITH: Could you give us... how about through where we are, November
11th... are you seeing a little bit more help from the consumer or are you
tracking the results that are similar to what you've reported in the past?

TOM SHULL: I'd like to be able to comment on that, but I'm being advised, I'm
being nudged by our legal counsel right now... I think it's... Let me put it
this way. We're right on track with where we'd like to be for the fourth
quarter. Let me reference back to 2001 and 2002. We exceeded our expectations in
2001 and 2002. We can't predict that that's what will happen this year, but just
bear in mind we did exceed our expectations in those two years and again right
now we're tracking to what we forecast through the end of the year, and as
Charles said, we're looking at an EBITDA on the low end of $12 to 14 million,
but if the consumer comes back strong, then that could... we could have an up
side there.

DAVID SMITH: Okay, thank you.

OPERATOR: Thank you. Our next question is coming from Glen Friedman (ph). Your
line is live.

GLEN FRIEDMAN: Hi, hello everybody. How are you doing?

SPEAKER: Hi Glen.

GLEN FRIEDMAN: Good. A question for you, Tom. How, other than the economic
benefits that you stated, the $90 million I guess saving to shareholders, can
you, I guess, outline some details as to how you see other benefits to the
common shareholders? It's been very difficult to try to figure out financially
and legally what this recapitalization has meant to us.

TOM SHULL: That's a very good question. I would say, first of all, as you recall
we were very concerned about what we believed to be improper behavior on the
part of Richemont back in May, in particular May of this year, so we did file a
declaratory judgment motion to seek a judge's view of that. The judge has now
rendered his opinion and that opinion we must respect. It doesn't, in our view,
doesn't change what we believe happened in terms of the facts, but on the other
hand, it is a judgment we will respect and move forward. The issue has never
been with Chelsey Capital. We in fact during the course of discovery, we did not
uncover any behavior that could be construed as having been involved with
Richemont in any way on the transaction that could be

deemed as improper, so it's very important to understand that one of the useful
benefits, if there are any, in this kind of a process was the fact that we were
able to determine with certainty at least from the discovery that we were able
to undergo that Chelsey had not been involved with Richemont in any way in
terms of exchanging material non-public information, so that was a very
important discovery for us. In addition we felt it important to get the ruling
of a judge on this important matter so that the... if in fact, Richemont had
been deemed to do something improper that the transfer would not have occurred.
It did take longer than most people are happy with. The good news is sometimes
these deliberations can take years. I'll even cite the Kaul litigation that we
still have going on with my predecessor which now has taken over two years, in
any event, so the good news is that the judge did render a fairly quick opinion
and we can get on with our lives and practically then we were able to evaluate
independently and in a pure way through the Transactions Committee, the
economic benefits of the Chelsey package, so that's what the Transactions
Committee did with the advice of counsel, as I said, and with Houlihan Lokey as
their financial advisors for finding that it was a transaction that would
benefit all the shareholders. I would like to say though in the last few weeks
we've worked very closely with Chelsey to come up with a corporate governance
structure that we believe to be beneficial to all the shareholders. The new
Transactions Committee in particular is one that's very important for all the
shareholders, but particularly potentially the common shareholders if there
could be something that happens that could potentially harm them, although
obviously we don't think that would happen, but it is my belief that Martin
Edelman, Dave Brown, and Basil Regan are in the best position as independent
directors to evaluate any transaction that's being contemplated as it relates
to redeeming the Series C Preferred and doing what's in the best interest of
the shareholders. So, I think one of the major breakthroughs, and Chelsey was
very supportive of this, was to set up a Transactions Committee that could
benefit all parties, but in particular be one in which the common shareholders
could have faith in as a way to make sure that even though Chelsey controlled
the Board that the Transactions Committee would be reviewing transactions in a
way that was fully independent.

ED LAMBERT: And Tom, if I could just add. I think to address the question in
terms of sort of the upsides, I think there's a significant strategic
opportunity. As Tom highlighted a few minutes ago and we said over the last
several years, the Company needs scale and focus. We have not been able to
address it in terms of doing any acquisitions because of the balance sheet
limitations. Through this recapitalization, and once the Series B is retired
and we've got a clean balance sheet, that frees up the Company and Board from
being able to address those fundamentally strategic opportunities and given
sort of interesting changes and developments going on in the catalogue and
internet industry, there is opportunity there, and that's opportunity we would
not have before under the old capitalization.

GLEN FRIEDMAN: Are you saying that there's the potential now to do acquisitions
in the future?

ED LAMBERT: No, I'm saying we could not do it in the past because of the balance
sheet that we had. There's a lot of things that have to happen going forward in
terms of ensuring that the Series C is retired and ensuring adequate
capitalization beyond that, so I'm just saying that's an opportunity that we
have not had in the past period.

GLEN FRIEDMAN: Okay, and...

TOM SHULL: I think it's fair to say, one other thing Glen I should mention --
sorry to interrupt -- but I think it's important that as you recall Richemont
clearly wanted to exit their investment. We can't speculate as to precisely
what Chelsey's intentions are, but certainly in our dialogue with them, they
are open to anything that will maximize shareholder value, whereas in the case
of Richemont, because they wanted to exit their investment, it didn't necessary
lead to a strategy that could maximize value. That's all I'll say on it, but I
think it's important to note that Chelsey is very open to maximizing values for
everyone, and that means that we can look at a whole host of potential options
that we perhaps didn't have an opportunity to look at before.

GLEN FRIEDMAN: Thank you. As far as Chelsey's intentions are concerned, is
there anything you'd care to say about the history of Chelsey prior to the
transaction with Richemont. I was under the impression, and I could be wrong,
again, I don't make my living doing this and I'm not as intricately involved,
but it was my impression that Chelsey basically will come in and I guess, not
particularly force anything onto a company, but that their interest might not
be in developing business but doing something that can either dissolve a
business or something along those lines for the benefit, of course, of
shareholders.

TOM SHULL: I'm not sure I would fully agree. I think part of it is that they
will  be joining us shortly and we'll have a better idea collectively what
their desires are for the Company. As I said, clearly in discussions with the
principle, Stuart Feldman and his partner, Bill Wachtel, it certainly is...
they are very open to anything that would create shareholder value, so I would
not... that was certainly a concern we had because we had felt that pressure
under Richemont's control that their clear intention was to exit their
investment. I certainly have not, as I've gotten to know them better... I'll
just speak real openly. I have not gotten any sense at all that they're not
going to do anything to  maximize value, so the issue is with Richemont we knew
what their game plan was and they were quite up front about that. I mean they
clearly wanted to exit their investment. They had invested hundreds of millions
of dollars in the Company and wanted to get out. Obviously during that time the
Company didn't perform well and had some of its worst years in its history, but
we've moved beyond that. Now let's focus on the future and let's focus with a
partner that has certainly the financial wherewithal to invest in prudent ways
that help them in terms of their return and also that would help Hanover.

GLEN FRIEDMAN: Okay, and one final question for now. I guess I'm a little
confused about Basil Regan's agreement or role in the re-capitalization of this
company. I don't know the legal ramifications if there are any, but Mr. Regan is
a member of the Board of Directors and a large common shareholder, and I'm just
wondering if there was a conflict of interest in any of his actions taken with
Chelsey and further if the independent directors approved the deal?

TOM SHULL: Right. I just want to mention that it's the Transactions Committee
that has moved on this Memorandum of Understanding, so that's the first thing.
It's the independent directors who have recommended to the Board that we move
forward with this. There will be a vote on the Recapitalization Agreement by
the full board, and obviously Basil, who has not been involved on the
Transactions Committee because in the current board formulation, he is not
viewed as an independent. He has been extremely honorable in how he's handled
himself during this whole process, and has been clearly doing everything in the
best interests of all shareholders, but also keeping a watchful eye on the
common shareholders in a way that meets his fiduciary duties to the Company, so
all I would say is that he will not... he doesn't benefit from this other than
what the other shareholders would benefit. He gets the same benefit that the
other common shareholders get from this transaction. There isn't anything...
all he does is that at some point he has to as part of his 14F-1 process, he
has to basically vote his shares, but there's not an actual formal vote, but he
has to commit his shares, otherwise you don't have a 51% as part of the
transaction.

I have...Sarah, why don't you clarify from a legal standpoint what this means
because from a legal standpoint you could clarify...

SARAH HEWITT: The 14F actually is a notice filing and a notice to shareholders
of a change in directors and Basil has indicated to Chelsey and to the Company
that this is a transaction that he supports.

TOM SHULL: Right, but the only way you could get to a 14F is if you have over
50%, correct Sarah?

SARAH HEWITT: If you have agreement of the Board and the parties.

TOM SHULL: The Board and the parties and over 50% of the shares, otherwise you
couldn't move forward with a 14F

GLEN FRIEDMAN: Okay, well I appreciate that and good luck going forward.

TOM SHULL: Okay, thank you very much, Glen.

OPERATOR: Thank you. Our next question is coming from Bob Wilcox. Your line is
live, sir.

BOB WILCOX: Yes, good afternoon.

TOM SHULL: Hi.

BOB WILCOX: I missed the first part of the conference call and just barely
skimmed the filing this morning. My questions are two part. From what I gather,
assuming this transaction goes through, there will be a stoppage of the interest
clock on the Chelsey preferred as of now. If this is correct, shouldn't this
transpose for us into actual earnings rather than EBITDA over a relatively quick
time?

ED LAMBERT: Okay, let me speak to that. Obviously there is the debt, what is now
classified as debt has been reduced significantly from what's on the books,
around $113 million down to $56. The interesting issue is that this was
previously classified as equity and there's a lot of interesting accounting
issues tied up with FAS 150. In fact we just had an Audit Committee meeting
today and KPMG is starting a process now to review this transaction because
obviously this is a new development, and they're going to be advising the Audit
Committee with regards to the proper accounting treatment. We would expect that
there is going to be a gain of some type associated with this. We don't know
from a timing standpoint whether it all will be at essentially one point upon
the closure, or if it is over several periods, so that's something the Audit
Committee will be again getting advice from KPMG and we'll have to update you on
the future, but we do anticipate an earnings pickup as a result of that.

BOB WILCOX: I thank you very much. Secondly, I know nobody has addressed this
yet. It's a... probably a touchy subject, but what is the feeling of the current
management team? Are they staying the course, or this is probably questions that
can't be answered, but I have been very impressed over the years with how this
company has turned around and I feel it's due mainly in part to the current
management team, and I'd like to know what their intentions are. Tom, can you
address that please?

TOM SHULL: Sure, absolutely. I think it's fair to say we've worked very closely
as a team, the current management, and we're committed to continuing the
operational turnaround and also to facilitating the process of selling non-core
assets to maximize value for all the shareholders so that... you know, one of
the significant merits of this transaction is that once the... new Series C is
reduced to $56 million versus the $112 million that it's currently at, then we
do have a very good chance of significantly reducing that overhang so that the
common stock can increase in value once a major portion of that overhang is
lifted, so we really want to focus in the coming months on selling non-core
assets, reducing the preferred, and being in a position to align the interests
of the preferred and the common, and we certainly have not been in that position
in the three years that I've been here.

BOB WILCOX: Well, thanks very much.

TOM SHULL: Thank you.

OPERATOR: Thank you. Our next question is a follow up coming from David Smith of
Smith Capital.

DAVID SMITH: A quick follow up and I'll make it a quick one. Are you able at
this point in time, once this transaction is completed, to buy stock back?

ED LAMBERT: I'm sorry, just so I understand your question. Who are you directing
that to? Are you directing that to all shareholders, to management...I'm trying
to understand your question.

DAVID SMITH: To management, to the Company. Once the transaction is completed,
do you have...is there going to be a covenant in there that says you cannot buy
stock back in the open market?

ED LAMBERT: Okay, actually what I'd like to do is because that's from a legal
standpoint, I'd like to get the advice of our counsel with regards to that.

SARAH HEWITT: I believe that the credit agreement with Congress limits the
ability of the Company to do that.

DAVID SMITH: Okay, then you think it's a Congress facility, not the other
facility?

SARAH HEWITT: What other facility?

DAVID SMITH: Well, the new debt.

TOM SHULL: You mean the new Series C?

DAVID SMITH: The new Series C.

SPEAKER: Right.

SARAH HEWITT: Right.

TOM SHULL: I don't think they'd be any limitations. That's not contemplated. We
haven't certainly discussed that point so to my knowledge there's isn't any
limit on buying back the stock as it relates to the Series C.

DAVID SMITH: Okay, second would be then the other one is essentially on the
split, the ten for one I guess it is that has... is that basically like an
authorized split or is that sort of a part of the whole package that will take
place?

ED LAMBERT: Again, that's related to again the Company's par value, but I would
like Sarah to also address that from a legal standpoint as well.

SARAH HEWITT: The proposal is to address the reverse split at the first
shareholders meeting following the closing, so presumably next spring, and it
would be a split of all of the authorized and outstanding common stock.

DAVID SMITH: I understand, but that will a proposal be on the proxy?

SARAH HEWITT: Yes,...

DAVID SMITH: Okay, that's...

SARAH HEWITT: But Mr. Regan and Chelsey have agreed to vote for it.

DAVID SMITH: I understand. I just wanted to make...so it will be on the proxy?

SARAH HEWITT: Yes.

DAVID SMITH: Thank you.

SPEAKER: Thank you.

OPERATOR: Thank you. Our next question is coming from Michael Angerman of
Arcadian Group. Your line is live.

MICHAEL ANGERMAN, ARCADIAN GROUP: Hi, I wanted to get some more information on
Chelsey Direct. Tom, you referred to them as Chelsey Capital. Are they two
different entities or the same entity?

TOM SHULL: Chelsey Capital is the parent firm. Chelsey Direct is a specific
vehicle set up for this transaction. Chelsey Capital and Chelsey Direct are one
and the same from a control standpoint.

MICHAEL ANGERMAN: Okay, great. Can you give me some information on Chelsey
Capital because or how do I find out more information on Chelsey Capital. They
don't have a web page. I actually looked for them on the internet and I can't
find any information. I wanted to ask you some questions on Chelsey Capital just
so the shareholders would have a better understanding about the Company that's
going to be controlling the Board, etcetera, etcetera.

TOM SHULL: I would... This is Tom. I would suggest that you... well... Maybe
what you could do is put together your questions and I'd be happy to give them
to Stuart Feldman who is the principle of Chelsey Capital. You know, it is a
private organization and I don't know whether they would be able to answer the
questions or ... I can't put myself in their position, but we'd certainly would
be pleased to pass on any questions you might have about them. Also, I think
there is some information available if you were to do a internet search.

MICHAEL ANGERMAN: I just did one. I didn't see anything.

TOM SHULL: Yeah, there isn't a lot of information. You're right.

MICHAEL ANGERMAN: So, Tom, what should I do? Should I send you an email with the
questions?

TOM SHULL: That would be fine.

MICHAEL ANGERMAN: Okay, great. And what email address should I use for you?

TOM SCHULL: At tshull@hanoverdirect.com.

MICHAEL ANGERMAN: Okay great. I'll send that email to you today, and then you'll
send it on to those folks and then you'll send me the email back? Does that
sound good?

ED LAMBERT: Yeah, that'll be fine.

TOM SCHULL: That's fine.

MICHAEL ANGERMAN: Okay, great, and also if you could just give me some contact
information for them, that would be great too because it might just be easier
for me to contact them directly.

ED LAMBERT: What we'll do again is just forward the information and the
questions you have. We'll forward it to them and I'm sure they'll be developing
their own information strategy.

TOM SCHULL: What we would encourage is obviously a direct dialogue between you
and them, but if that isn't something they're comfortable doing, I don't want to
presume that that's what they would be comfortable with.

MICHAEL ANGERMAN: Okay great. And based on all this, can you give us a little
bit of just history about those guys, sort of what they've done in the past,
what other investments they're involved in? Is there anything that you could
give us information on right now that would tell us some more information about
them? Is there anything that you could say now?

ED LAMBERT: No, we're really not in a position to.

TOM SHULL: We're really not in a position... and plus we don't have a lot of
detailed information. It's, we understand, a hedge fund. I know that Stuart was
a trader. I mean trading is his background primarily, but he's done extremely
well through many years of hard work, and so that's about all I can say. I
don't know what else to say. We'd be happy to pass your questions on to them,
but we do know that he's done extremely well in his past investments. That's
all I do know.

MICHAEL ANGERMAN: Great, can you do me a favor then. Can you please spell
Stuart's first and last name and Bill Wachtel's first and last name?

TOM SHULL: Sure. S, T, U, A, R, T and F, E, L, D, M, A, N.

MICHAEL ANGERMAN: Okay.

TOM SHULL: And Bill Wachtel - W, A, C, H, T, E, L.

MICHAEL ANGERMAN: Okay, and those are the two principles in Chelsey Capital?

TOM SHULL: That's in Chelsey Direct, correct.

MICHAEL ANGERMAN: Well, Chelsey Capital, if they're the same entity, they're
also principles in Chelsey Capital too?

ED LAMBERT: We don't know the specifics there, so we don't want to comment.

TOM SHULL:...The relationship or partnership is between Bill Wachtel and Stuart
Feldman as it relates to Chelsey Capital. It is my understanding that both are
principles of Chelsey Direct. That's my understanding.

ED LAMBERT: Yeah, the other thing I would do is just reference their filings. If
you look at 13D filings that

they have made over the four or five months, I'm sure you'll be able to get
basic information that you need.

MICHAEL ANGERMAN: So basically look at the all the 13D filings they've made with
other companies, etcetera.

ED LAMBERT: Yeah, I would recommend that...look at the filings for this company.

TOM SHULL: Or our company.

ED LAMBERT: Marisha, if we could have just a couple more questions please.

OPERATOR: Thank you. Our next question is coming from Joe Rousseau (ph).

JOE ROUSSEAU: Hi guys. Just a quick question. How is this dilution of the stock
and then, who knows, maybe in the spring a reverse split going to benefit the
common shareholder? Could you address that please?

ED LAMBERT: Yeah, remember. Fundamentally, there's forgiveness of a significant
amount of preferred debt right now, and essentially what the Company is doing is
taking the benefit and, in consideration for that, Chelsey gets additional
shares, so the shareholder who benefits from the fact that the overhang of the
preferred stock is significantly less, and that should not be overlooked because
that's ultimately what that means is any value for the Company and its various
assets, the common shareholder is going to be that much closer to realizing some
of that value because before again, we'll repeat we had a Preferred B instrument
that was currently at $113 million and was going to rise to $146 million, and so
the common shareholder would not get a penny of benefit until that was paid off
as well as the secured debt with Congress. So again, this is a significant
benefit for the common shareholder in that regard that in my opinion overcomes
the loss from the dilution.

JOE ROUSSEAU: And what about the reverse split?

ED LAMBERT: Well, the reverse split is not going to, in my opinion, not going to
have that much of an impact of the common shareholder. It's most designed for
again reasons for the balance sheet. Sarah, do you want to make any comments
with regards to the reverse split?

SARAH HEWITT: The reverse split and the reduction in the par value will help the
Company create surplus, so should they have funds from non-core asset sales,
they'll be able to redeem the preferred.

TOM SHULL: In addition I think it is fair to say the reverse split will enable
us to have a stock price that quite possibly would be tracked by more analysts
and therefore get, particularly as we continue our improvements, more interest
in the Company itself.

JOE ROUSSEAU: Right, I understand that. It's just that the history of reverse
splits is not a good one as I'm sure you know. And so, is this something that I
understand that Regan Partners and Chelsey are certainly in favor of. Is this
something that management is in favor of as well?

ED LAMBERT: Well, remember that again the purpose addresses the issue with par
value. Once that's addressed we can use proceeds from the sale of assets to
retire the Series C. Once that is done, you've got great co-linearity of
interests among all the shareholders, and that is a good thing.

TOM SHULL: Also, I think it's fair to say I know there is a number of
shareholders that have raised that topic on previous calls, Joe, and I don't
know... I guess the jury is out as to whether this will have a positive or

negative impact. I understand your view. I think that is one of the reasons why
we're taking it to a vote at the shareholder meeting to see where things stand.
I don't know also exactly where Basil Regal and Stuart Feldman are on this in
terms of final conclusion about this idea. So, I think it's fair to say I know
they would be open to suggestions as to how we proceed, so I don't think
there's... this is not an open and shut situation. So I would encourage you to
talk to -- if you're comfortable -- talk to Basil Regan or to Stuart Feldman.

JOE ROUSSEAU: Okay, thank you.

OPERATOR: Thank you. And our final question is coming from David Smith of Smith
Capital.

DAVID SMITH: I had one more. You... in the deal there is a $10 million
authorization for or 10 million share preferred that's authorized by the deal.
Could you explain a) why that is there, and b) what its purpose would be for?

TOM SHULL: There are no plans for its use at all. It's a normal course, you
know, part of capitalization, so it's not that unusual at all to see this kind
of a situation in a capital structure, so it's authorized by the deal, but it's
not...

ED LAMBERT: Contingency. It's nothing...

TOM SHULL: It's a contingency.

ED LAMBERT: It's nothing planned.

TOM SHULL: Certainly nothing planned regarding, I think there were suggestions
it'd be the directors or something like that. Clearly it is not contemplated for
that purpose.

DAVID SMITH: You answered my questions and some of the stuff that I saw. Thank
you.

TOM SHULL: Okay, thank you David.

ED LAMBERT: Marisha?

OPERATOR: I'm showing no further questions. I'll now turn the call back over to
the speakers for any closing or further comments.

ED LAMBERT: Okay, terrific. Well, again I would like to first of all on behalf
of the Company thank everyone for their participation. I would urge everyone to
read carefully the filings that have been made today, not only the 10-Q, of
course, but also the 8-K filing with regard to the MOU. It's an important
transition step for the Company, and just on a personal note, it has been my
pleasure to serve you, the shareholders, as well as the employees and management
team of Hanover Direct. I will miss the Company and the shareholders should rest
assured, you've got an excellent management team working on your behalf and they
do work on your behalf. So thank you all for your time and we'll look forward to
speaking to you next year. Thank you. Bye, bye.

OPERATOR: Thank you. That does conclude this afternoon's teleconference. You may
disconnect your lines and have a wonderful day.

The conference call ended at approximately 3:54 P.M. (Eastern Standard Time).

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                          HANOVER DIRECT, INC.
                                          --------------------------------------
                                                       (Registrant)

November 12, 2003                         By:        /s/ Brian C. Harriss
                                          --------------------------------------
                                          Name:  Brian C. Harriss
                                          Title: Executive Vice President,
                                                 Finance and Administration