8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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): March 14, 2005

Hanover Direct, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-12082	13-0853260
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1500 Harbor Boulevard Weehawken, New Jersey	07086
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (201) 863-7300

1500 Harbor Boulevard, Weehawken, NJ 07086

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Section 2 – Financial Information
	Item 2.01 Completion of Acquisition or Disposition of Assets
Section 5. Corporate Governance and Management
	Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Section 9 – Financial Statements and Exhibits
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EX-10.1: EMPLOYMENT AGREEMENT
EX-99.1: PRESS RELEASE

Section 2 – Financial Information

Item 2.01 Completion of Acquisition or Disposition of Assets

     (a) On March 14, 2005 Hanover Direct, Inc. (the “Company”) completed the sale of the stock of Gump’s Corp. and Gump’s By Mail, Inc. to Gump’s Holdings, LLC (the “Purchaser”) for $8.5 million subject to post closing adjustments. As part of the closing, Keystone Internet Services, LLC, a wholly owned Company subsidiary, entered into a Direct Marketing Services Agreement with the Purchaser to provide a full range of merchandise fulfillment services for the Gump’s catalog and direct marketing businesses. The terms of both transactions did not vary from those previously reported by the Company in the Current Report on Form 8-K filed on February 16, 2005.

Section 5. Corporate Governance and Management

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     (c) The Company appointed John Swatek as its Senior Vice President ,Chief Financial Officer and Treasurer on March 15, 2005. Mr. Swatek, who will join the Company at the beginning of April, will report directly to the Company’s Chief Executive Officer.

     Prior to joining the Company, Mr. Swatek was Vice President and Controller of Linens ‘n Things, Inc. Before joining Linens ‘n Things in 2001, Mr. Swatek held various positions with Micro Warehouse, Inc. including serving as its Senior Vice President, Finance from 2000 to 2001.

     Under the March 15, 2005 Employment Agreement between the Company and Mr. Swatek, Mr. Swatek will be paid an annual salary of $270,000 and will be granted options to acquire 50,000 shares of the Company’s common stock pursuant to its 2000 Management Stock Option Plan. One third of the options vested upon execution of the Employment Agreement and the balance will vest in two equal annual installments on the anniversary of the original grant date, subject to earlier vesting in the event of a change in control of the Company (as that term is defined in the Employment Agreement). Mr. Swatek will be entitled to participate in the Company’s discretionary bonus plan for executives. The Employment Agreement has a term expiring on May 6, 2006 and provides for reimbursement of up to $25,000 of foregone benefits as a result of his decision to join the Company.

     The Employment Agreement provides for a lump sum change in control payment equal to Mr. Swatek’s annual compensation if his employment is terminated during the term and a change in control occurs during that time. The Employment Agreement also provides for one year of severance payments if Mr. Swatek is terminated without cause or terminates his employment for good reason (as both terms are defined in the Employment Agreement) during the term and he is not otherwise entitled to change in control benefits. Mr. Swatek will also be entitled to one year of severance payments equal to his annual base salary if his agreement is not renewed at the end of the term.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

10.1   Employment Agreement dated March 15, 2005 between John Swatek and Hanover Direct, Inc.

Exhibit 99.1 Press Release, dated March 18, 2005

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)
March 18, 2005	By:	/s/ Wayne P. Garten
		Name:	Wayne P. Garten
		Title:	Chief Executive Officer and Acting Chief Financial Officer

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is made as of March 15, 2005 between John Swatek (“Executive”) and Hanover Direct, Inc., a Delaware corporation (the “Company”).

     1.      Provision of Services. Executive shall serve as the Company’s Senior Vice President, Chief Financial Officer and Treasurer.

     2.      Responsibilities. Executive shall act and serve during the term of this Agreement as the Senior Vice President, Chief Financial Officer and Treasurer of the Company and shall report to the Company’s President and/or Chief Executive Officer. Executive’s employment responsibilities will include those normally held by the senior vice president, chief financial officer and treasurer of a corporation of a similar size and nature to the Company. Executive shall devote his full-time efforts in connection with his role as Senior Vice President, Chief Financial Officer and Treasurer of the Company.

     3.      Term. Subject to Section 6 of this Agreement, the term of this Agreement (the “Agreement Term”) and the term for the services of Executive hereunder shall commence as of April 4, 2005 and shall terminate on May 5, 2006.

     4.      Compensation. As consideration for Executive’s performance of services hereunder as Senior Vice President, Chief Financial Officer and Treasurer, the following compensation shall be payable pursuant to this Agreement:

(a)	Executive shall receive base compensation at the rate of $270,000 per annum (the “Base Compensation”), payable in accordance with the Company’s normal payroll policies.
(b)	Executive shall be entitled to participate in such bonus plans with such targets as the Compensation Committee of the Board of Directors of the Company (the “Board of Directors”) may approve in its sole discretion determined in a manner consistent with bonus opportunities afforded to other senior executives under such plans. For purposes of such participation, Executive shall be entitled to a minimum annual bonus equal to 50% of the amount of his then Base Compensation; provided, however, that the maximum annual bonus payable to Executive shall be equal to 150% of the amount of his then Base Compensation.
(c)	The Company shall provide Executive with the employee benefits it provides to its other senior executives (such as health, life insurance and long-term disability), including but not limited to 4 weeks of paid vacation per year.
(d)	The Company shall reimburse Executive for his reasonable out-of-pocket expenses in performing services for the Company as its Senior Vice President, Chief Financial Officer and Treasurer (such as travel, meals, communications and lodging) which are incurred during the Agreement Term on Company business. Executive shall submit invoices and

	documentation for such reimbursable expenses on a monthly basis, and the Company shall process payment of the same promptly and in accordance with its customary procedures. In addition, the Company shall reimburse Executive for up to $5,000 of attorneys’ fees incurred by him in connection with legal advice relating to, and the negotiation of, this Agreement.
(e)	The Company shall pay Executive a $25,000 sign-on bonus on his first day of employment with the Company if he does not receive his bonus for the calendar year 2004 from his previous employer.

     5.      Stock Options. Subject to the resumption of trading of the Company’s Common Stock, the Company shall grant Executive an option (the “Executive Option”) to purchase an aggregate of 50,000 shares of the Company’s Common Stock (“Shares”) under the Company’s 2000 Management Stock Option Plan. The Executive Option shall be exercisable for 10 years and shall be subject to the terms and conditions set forth in the applicable Stock Option Agreement between Executive and the Company, a form of which is annexed hereto.

     The Executive Option shall vest over a 2-year period. Upon the execution of this Agreement, the Executive Option shall be one-third vested. Thereafter, the remaining unvested portion of the Executive Option shall vest at the rate of 50% per year; provided that the Executive Option shall vest in its entirety and become fully exercisable upon the earliest to occur of: (i) Executive’s resignation “For Good Reason” (as defined below), (ii) the Company’s termination of Executive’s services hereunder, other than “For Cause” (as defined below), or (iii) a “Change of Control” (as defined below) of the Company. To the extent the Executive Option vests and becomes exercisable pursuant to this Section 5, it shall remain exercisable for the 90 day period immediately following the date of the applicable resignation, termination or Change of Control. Any unvested portion of the Executive Option on the date of Executive’s resignation or termination, as applicable, shall be forfeited. In the event of vesting of the Executive Option on account of a Change of Control, the Company shall use its reasonable best efforts to ensure that such vesting shall take place sufficiently in advance of the Change of Control (but subject to its occurrence) to permit Executive to take all steps reasonably necessary to exercise the Executive Option and to take such action with respect to the Shares purchased under the Executive Option so that those Shares may be treated in the same manner in connection with the Change of Control transaction as the Shares of other Company shareholders.

     5A.      Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

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(a)	“For Good Reason” shall mean the voluntary resignation by Executive of his employment with the Company on account of any of the following actions: (i) a substantial and material diminution of Executive’s duties or responsibilities for the Company; provided that if following a Change in Control (as defined below), Executive is appointed to a position where he reports directly to a new Chief Financial Officer or is appointed to a position as Chief Financial Officer of a successor, subsidiary or affiliate of the Company following such Change in Control, such appointment shall not be deemed to be a substantial and material diminution of Executive’s duties or responsibilities, (ii) any reduction of Executive’s base salary (as in effect as of the first day of the Agreement Term), or (iii) the Company’s (or a successor to the Company pursuant to a Change of Control) requiring Executive to regularly report to work at a facility that is more than 30 miles from Weehawken, New Jersey; provided, however, that in all cases, in order to terminate his employment with the Company For Good Reason, Executive must notify the Company in writing that Good Reason exists within 30 business days (“Business Days”) of his knowledge of the event or events constituting Good Reason. The Company shall thereafter have 30 Business Days within which to cure Executive’s otherwise Good Reason (the “Good Reason Cure Period”). Unless Executive’s Good Reason is cured during the Good Reason Cure Period, his resignation For Good Reason shall become effective on the first Business Day following the conclusion of the Good Reason Cure Period.
(b)	“For Cause” shall mean the involuntary termination by the Company of Executive’s employment with the Company on account of his (i) material breach of any of the material terms of the Agreement, (ii) willful and continued failure to perform his regular duties for the Company, (iii) commission of an act of fraud relating to and adversely affecting the Company, (iv) conviction of, or a plea of guilty or nolo contendere to, a felony, or (v) gross negligence in the performance of his duties which adversely affects the Company. Notwithstanding the foregoing, Executive shall not be terminated For Cause without (A) delivery of a written notice to Executive setting forth the reasons for the Company’s intention to terminate Executive’s employment hereunder For Cause; (B) the failure of Executive to cure the nonperformance, violation or misconduct described in the notice referred to in clause (A) of this paragraph, if cure thereof is possible, to the reasonable satisfaction of the Board of Directors, within 15 Business Days of Executive’s receipt of such notice (the “For Cause Cure Period”); and (C) an opportunity for Executive, together with Executive’s counsel, to be heard before the Board of Directors.
(c)	“Change of Control” shall mean the first to occur of any of the events described in clauses (i) through (iii) below, following the first day of the Agreement Term:

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     (i)      When any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a “Person”) becomes, through an acquisition, the beneficial owner of shares of the Company having more than 50% of the total number of votes that may be cast for the election of directors of the Company (the “Voting Shares”); provided, however, that the following acquisitions shall not constitute a Change of Control:

     (A)      if a Person owns less than 50% of the voting power of the Company and that Person’s ownership increases above 50% solely by virtue of an acquisition of stock by the Company, then no Change of Control shall have occurred, unless and until that Person subsequently acquires one or more additional shares representing voting power of the Company; or

     (B)      any acquisition by a Person who as of the first day of the Agreement Term owned at least 33% of the Voting Shares.

     (ii)      (A) Notwithstanding the foregoing, a Change of Control will be deemed to occur upon the closing of any of the following (each, a “Transaction”):

     (I) any reorganization, merger, consolidation or other business combination of the Company;

     (II) any sale or any series of sales occurring on or after the date of this Agreement, involving all or substantially all of the Company’s assets; or

     (III) a complete liquidation or dissolution of the Company.

     (B) Notwithstanding clause (ii)(A) above, neither of the following types of Transactions will be deemed to give rise to a Change of Control:

     (I) a Transaction involving only the Company and one or more of its subsidiaries; or

     (II) a Transaction (other than as described in clause (ii)(A)(II) of this definition) immediately following which the shareholders of the Company immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity.

     (iii) When, within any 24 month period commencing on or after the first day of the Agreement Term, persons who were directors of the Company (each, a “Director”) immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death or disability) to constitute at least a majority of the Board of Directors or the board of directors of any successor to the Company. For purposes of this clause (iii), any Director who was not a Director as of the first day of the Agreement Term shall be deemed to be an Incumbent Director if such Director was elected to the Board of Directors by, or on the recommendation of, or with the approval of, at least a majority of the members of the Board of Directors or its Nominating Committee who, at

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the time of the vote, qualified as Incumbent Directors either actually or by prior operation of this clause (iii), and any persons (and their successors from time to time) who are designated by a holder which, as of the first day of the Agreement Term, held 33% or more of the Voting Shares, to stand for election and serve as Directors in lieu of other such designees serving as Directors on the first day of the Agreement Term shall be considered Incumbent Directors. Notwithstanding the foregoing, for purposes of this clause (iii), any director elected to the Board of Directors to avoid or settle a threatened or actual proxy contest shall not, under any circumstances, be deemed to be an Incumbent Director.

(d)   “Disability” shall mean the inability of Executive to perform his duties under this Agreement for 3 consecutive months or an aggregate of 180 days within a 2-year period.

     6.      Termination and Severance. The following provisions shall govern the termination of Executive’s employment under this Agreement:

(a)   The Agreement, the Agreement Term, the term for services of Executive and the employment of Executive hereunder will terminate upon the first to occur of the following:

(i)	the third day after written notice by the Company to Executive that Executive’s employment under this Agreement has been terminated For Cause following the end of the For Cause Cure Period;
(ii)	the tenth day after written notice by Executive to the Company that Executive’s employment under this Agreement has been terminated pursuant to his resignation For Good Reason following the end of the Good Reason Cure Period;
(iii)	the expiration of the Agreement Term;
(iv)	the death or Disability of Executive;
(v)	the day the Company terminates Executive’s employment under this Agreement other than For Cause; or
(vi)	the thirtieth day after written notice by Executive to the Company that the Executive’s employment under this Agreement has been terminated pursuant to his resignation other than For Good Reason.

(b)   In the event of the termination of Executive’s employment under this Agreement for any of the reasons provided in Section 6(a), Executive shall receive hereunder the Base Compensation through the end of the month in which the date of termination has occurred, plus a termination payment as follows:

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(i)	If the termination or resignation is pursuant to Section 6(a)(i), 6(a)(iv) or 6(a)(vi) above, no additional amount shall be due and owing to Executive.
(ii)	If the termination or resignation is pursuant to Section 6(a)(ii) or 6(a)(v) and the Executive has not received or become entitled to receive a Change of Control payment under Section 6(b)(iii), Executive shall be entitled to receive, subject to his continued compliance with the requirements of Sections 9 and 10 of this Agreement, the following severance payments (a) continued payments of his monthly Base Compensation for a period equal to 12 months payable in accordance with the Company’s normal payroll practices and policies; and (b) the pro rated portion (based upon the number of days in the fiscal year prior to the effective date of termination) of bonuses earned for the fiscal year in which the effective date of termination occurs pursuant to the Company’s bonus plans, as applicable (based upon the terms and conditions of the applicable bonus plan), as described in Section 4(b), accrued vacation and continued coverage under the Company’s health, life insurance and long-term disability benefit plans for the 12-month period immediately following Executive’s termination or resignation, as applicable. Any such bonus shall be paid to Executive, subject to his continued compliance with the requirements of Sections 9 and 10 of this Agreement, at such time as is consistent with the Company’s customary practice.
(iii)	If a Change of Control occurs within the Agreement Term and provided Executive has not received or become entitled to receive a payment under Section 6(b)(ii), then, subject to Section 6(b)(iv), Executive shall be entitled to receive a payment equal to 100% of his Base Compensation, such payment to be made in a lump sum within thirty days of Executive’s termination date.
(iv)	If the termination is pursuant to Section 6(a)(iii) and the Executive has not received or become entitled to receive a payment under Section 6(b)(iii), then, at the end of the Agreement Term, he shall be entitled to receive, subject to Executive’s continued compliance with the requirements of Sections 9 and 10 of this Agreement, monthly severance payments at the rate of Executive’s Base Compensation for a period of 12 months, payable in accordance with the Company’s normal payroll practices and policies and continued coverage under the Company’s health, life insurance and long-term disability benefit plans for the 12-month period immediately following the end of the Agreement Term.

(c)   Notwithstanding anything to the contrary contained in Section 6(b), solely to the extent that any payment to Executive under Section 6(b) could

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reasonably be expected to trigger the imposition of additional gross income, interest and/or tax under Section 409A(a)(i) of the Internal Revenue Code of 1986, as amended, on account of the requirements of Section 409A(a)(2)(B), any payment(s) otherwise required to be paid at the time or times as set forth in Section 6(b) shall be deferred for a period of 6 months and 1 day and, thereupon, a “catch-up” payment aggregating the total amount of such deferred payments shall be paid by the Company to the Employee in a single lump sum.

     7.      Arbitration. Any dispute or other controversy arising under or in connection with this Agreement (except that the Company may, at its election, seek to enforce Executive’s obligations under Section 9 and/or 10 of this Agreement in a court of competent jurisdiction) shall be settled exclusively by binding arbitration in New York, New York, in accordance with the Employment Dispute Resolution Rules then in effect with the American Arbitration Association. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Company shall pay all of Executive’s attorneys’ fees in connection with any arbitration brought by either of the parties hereto pursuant to this Section 7 in which Executive prevails.

     8.      Indemnity. If Executive is threatened with or made a party to, or called as a witness or deposed or subpoenaed in, any action, suit or other legal, administrative or governmental proceeding or other legal process by reason that Executive is or was deemed a consultant, officer, employee or other agent of the Company or any of its affiliates, the Company shall defend, indemnify and hold Executive harmless to the maximum extent allowed by applicable law and the Company’s Certificate of Incorporation and By-Laws against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, disbursements and expenses, including counsel fees reasonably incurred by Executive in connection therewith, to the extent the same are not paid under the Company’s D&O insurance policies (“Indemnified Liability” or “Indemnified Liabilities”); provided however, that Executive shall not be entitled to indemnification hereunder to the extent any such liability, obligation, loss, damage, penalty, action, judgment, suit, claim, disbursement or expense results from the gross negligence, willful misconduct or criminal conviction or other conduct which bars indemnification under applicable law (“Misconduct”) of Executive as determined by a court of competent jurisdiction. Payments under this indemnity in respect of indemnified settlements or judgments shall be paid at the time of final settlement or final judgment (from which no appeal may be taken), or, in respect of counsel fees or costs of defense, which shall be limited to one counsel, shall be paid at the time such fees or costs are incurred.

     The Company may require the Executive to deliver a written undertaking to return any amount advanced to him for indemnification hereunder if it shall thereafter be determined that indemnification is not available to Executive due to his Misconduct.

     This Section 8 shall survive the termination of this Agreement.

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     9.      Confidentiality. Executive shall at all times both during his employment hereunder and after termination thereof regard and preserve as confidential all trade secrets and other confidential information pertaining to the business of the Company that have been or may be obtained by Executive by reason of the performance of the terms of this Agreement. Executive agrees that all documents, reports, manuals, drawings, designs, tools, equipment, plans, proposals, marketing and sales plans, customer lists, or materials made by the Company or coming into Executive’s possession by reason of his performance under this Agreement, are the property of the Company and shall not be used by Executive in any way prohibited by this Agreement. Except as expressly provided herein, during the Agreement Term and after termination thereof, Executive shall not deliver, reproduce, publish or in any way allow, after due care, information describing any trade secrets or other confidential documents or things to be delivered or used by any third party without specific direction or written consent of the Company or in response to lawful process. Immediately upon termination of this Agreement, Executive shall promptly deliver to the Company all documents, tools, equipment, drawings, blueprints, manuals, material and significant or confidential letters and notes, reports, price lists, customer lists and copies thereof, and all other materials relating to the Company’s business and which are in the possession of or under the control of Executive. Confidential information as defined above shall exclude information or materials that become generally available to the public other than through disclosure by Executive in violation of this Agreement.

     This Section 9 shall survive the termination of the Agreement.

     10.      Nonsolicitation. During the Agreement Term and for a period ending on the later of (i) the period during which the Executive receives severance payments as provided herein, or (ii) one (1) year after the termination of Executive’s employment with the Company, Executive and/or any person, firm, corporation or other entity which is controlled by Executive, shall not, without the prior written consent of the Company, personally or as an employee, owner, consultant, manager, associate, partner, agent or otherwise, or by means of any corporate or other entity solicit for employment or hire any employee of the Company or any of its subsidiaries. Executive acknowledges that the restrictions contained in this Section 10 are reasonable and necessary to protect the legitimate interests of the Company, do not cause the Executive or his affiliates undue hardship, and that any violation of any provision of this Section 10 will result in irreparable injury to the Company and that, therefore, the Company shall be entitled to preliminary and permanent injunctive relief in any court of competent jurisdiction and to an equitable accounting of all earnings, profits and other benefits arising from such violation, which right shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.

     This Section 10 shall survive the termination of the Agreement.

     11.      Miscellaneous. This Agreement shall be governed by and construed in accordance with the internal laws of the state of New York.

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     12.      Modification. This Agreement may only be modified by mutual agreement.

     13.      Assignment. This Agreement is a personal service contract and may not be assigned by either party, except that the Company may assign this Agreement to its successor in interest in connection with a sale of assets, merger or similar transaction, or any Change of Control transaction, so long as the successor assumes the Company’s obligations hereunder.

     14.      Notices. All notices required or permitted by this Agreement shall be in writing and shall be deemed received when personally delivered, or the next business day after deposit in overnight mail or five days after mailing by registered mail. Notices shall be sent to the parties at their addresses set forth below or to such different addresses as such parties shall direct by notice sent in accordance with this paragraph.

     If to Executive:

Mr. John Swatek
Senior Vice President, Chief
    Financial Officer and Treasurer
Hanover Direct, Inc.
1500 Harbor Boulevard
Weehawken, New Jersey 07086
Email: jswatek@hanoverdirect.com

     with copies to:

___________________, Esq.
___________________
___________________
___________________
Fax.: ___________________
Email: ___________________

     If to the Company:

General Counsel
Hanover Direct, Inc.
1500 Harbor Boulevard
Weehawken, New Jersey 07086
Fax: 201-272-3498

     and

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President and Chief Executive Officer
Hanover Direct, Inc.
115 River Road, Building 10
Edgewater, New Jersey 07020
Fax: 201-272-3465

     15.      Counterparts; Telecopy. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by telecopy signature which shall be deemed an original.

     16.      Successors and/or Assigns. Whenever in this Agreement either of the parties hereto is referred to, such reference shall be deemed to include the successors and/or permitted assigns and/or personal representatives of such party, and this Agreement shall inure to the benefit of and shall be binding on the parties hereto and the successors and/or permitted assigns and/or personal representatives of each such party.

     17.      Entire Agreement. This Agreement (together with the Stock Option Agreement referred to herein) sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto.

     18.      No Conflict. Executive represents and warrants to the Company that neither the execution of this Agreement nor the performance of his obligations hereunder violate any agreement to which he is a party or by which he is otherwise bound.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

HANOVER DIRECT, INC.
By:	Wayne P. Garten
	Name:	Wayne P. Garten
	Title:	President and Chief Executive Officer

/s/ John Swatek John Swatek

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Hanover Direct, Inc
Wayne P. Garten
Chief Executive Officer
Tel: (201) 272-3406 MWW Group
Rich Tauberman
Tel: (201) 507-9500

HANOVER DIRECT ANNOUNCES APPOINTMENT OF NEW CHIEF FINANCIAL OFFICER AND CLOSING OF GUMP’S SALE

WEEHAWKEN, NJ, March 18, 2005 — Hanover Direct, Inc. (PINK SHEETS: HNVD) today announced that it had appointed John Swatek to serve as its Senior Vice President, Chief Financial Officer and Treasurer commencing April 2005. Mr. Swatek will report directly to Wayne P. Garten, the Company’s Chief Executive Officer. Prior to joining the Company, Mr. Swatek most recently served as Vice President and Controller of Linens ‘n Things, Inc. where he held various positions beginning in 2001. Prior to joining Linens ‘n Things, Inc., Mr. Swatek was employed by Micro Warehouse from 1997 through 2001, serving as its Senior Vice President, Finance from 2000 to 2001.

Mr. Swatek succeeds Charles E. Blue, who resigned effective as of March 8, 2005. Wayne P. Garten has served as acting Chief Financial Officer during the interim period.

The Company also announced the completion of its previously announced sale of the stock of Gump’s Corp. and Gump’s By Mail, Inc. to Gump’s Holdings, LLC, an investor group comprised of two venture capital firms and a private investment firm, for $8.5 million.

About Hanover Direct, Inc.

Hanover Direct, Inc. (PINK SHEETS: HNVD) and its business units provide quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as well as a comprehensive range of Internet, e-commerce, and fulfillment services to businesses. The Company’s catalog and Internet portfolio of home fashions, apparel and gift brands include Domestications, The Company Store, Company Kids, Silhouettes, International Male, Undergear and Scandia Down. Each brand can be accessed on the Internet individually by name. Keystone Internet Services, LLC (www.keystoneinternet.com), the Company’s third party fulfillment operation, also provides the logistical, IT and fulfillment needs of the Company’s catalogs and web sites. Information on Hanover Direct, including each of its subsidiaries, can be accessed on the Internet at www.hanoverdirect.com.