January 28, 2005


Mail Stop 0409

      VIA U.S. MAIL AND FAX (704) 366-5056

William W. Hodge
Chief Financial Officer
RCG Companies Incorporated
6836 Morrison Blvd., Suite 200
Charlotte, NC   28211-2668

Re:	RCG Companies Incorporated
	Form 10-K for the year ended June 30, 2004
	Form 10-K/A for the year ended June 30, 2004
	Form 10-Q for the quarter ended September 30, 2004
      File No. 001-8662

Dear Mr. Hodge:

      We have reviewed your above referenced filings and have the
following comments.  We have limited our review to Selected
Financial
Data, Management`s Discussion and Analysis and the Financial
Statements.  We will make no further review of your documents.
All
persons who are responsible for the adequacy and accuracy of the
disclosure are urged to be certain that they have included all
information required pursuant to the Securities Exchange Act of
1934.

      Where indicated, we think you should revise your documents
in
response to these comments in future filings.  If you disagree, we
will consider your explanation as to why our comment is
inapplicable
or a revision is unnecessary.  Please be as detailed as necessary
in
your explanation.  In some of our comments, we may ask you to
provide
us with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.



Form 10-K for the Year Ended June 30, 2004

Liquidity and Capital Resources, page 18

1. In future filings, please confirm that you will increase
disclosure in accordance with Item 303 of Regulation S-K in
respect
to off-balance sheet commitments, i.e. purchase obligations,
recent
acquisitions consummated and agreements entered into as well as
known
trends and other sources and uses of funds.

2. In addition, please confirm that you will expand in future
filings
your disclosure of Quantitative and Qualitative Disclosures about
Market Risk regards to your investment portfolio.  According to
the
financial statements, material gains have been recognized on
investments and material unrecognized losses have been disclosed.
Associated market risks should be discussed and quantified.  Refer
to
Item 305 of Regulation S-K for further guidance.


Auditor`s Report, page 22

3. Include the reports of the accountants that the principal
accountant is relying on in accordance with Rule 2-05 of
Regulation
S-X.  If these other accountants are not registered with the
PCAOB,
please supplementally advise why such registration was not
required.


Notes to Consolidated Financial Statements

Note 1-Significant Accounting Policies

Operations and Liquidity, page 28

4. In future filings include a more detailed discussion of the
Company`s ability or inability to generate sufficient cash to
support
its operations in the ensuing twelve months.  Refer to Section
607.02
of the Financial Reporting Codification and revise future periodic
filings accordingly.


Consolidation, page 28
5. Please tell us and disclose in future filings, the impact that
the
adoption of FIN 46R had on the Company.  Specifically, clarify to
us
how you evaluated your investment in Lifestyle Innovations under
FIN
46R.



Concentration of Credit Risk, page 29

6. We note that revenues from Vacation Express, a MyTravel Group
company, represented approximately 73% of the Company`s revenues
in
2003 and that Vacation Express was acquired effective October 31,
2003.  Prior to the acquisition were there any other affiliations
between the Company and Vacation Express such as common owners or
officers or was Vacation Express an independent third party?


Investments, page 30

7. Refer to the first paragraph under this heading.  Please
confirm
that these available for sale securities are reported at their
fair
value rather than "estimated values" and that when a quoted market
price is not available, fair value is determined using alternative
valuation methodologies as discussed in Appendix C to SFAS 115.
Please provide us with the disclosure you will include in future
filings to describe your accounting policy in accordance with SFAS
115.

8. Please clarify to us why the stock purchase warrants the
Company
periodically receives as compensation for services are accounted
for
under SFAS 133 rather than SFAS 115.   Specifically, how did you
determine that the instruments meet the criteria of paragraph 6 of
SFAS 133?  In addition, tell us and disclose in future filings how
you have applied the guidance of EITF 00-8 to these transactions.


Goodwill and Intangible Assets, page 31

9. Please tell us and disclose in future filings, the date of your
annual assessment of goodwill for impairment.  In addition,
disclose
the date the $1,199,690 write down was recorded and clarify
whether
or not it was associated with the annual impairment test.
Further,
include all of the disclosures required by paragraph 47 of SFAS
142,
including how the fair value of the reporting units was
determined.


Technology Solutions, page 33

10. We note that you are recognizing revenue on fixed fee
contracts
for web site development services using a cost to cost
methodology.
Assuming these service contracts are outside of the scope of SOP
81-
1, a cost to cost approach is generally not appropriate as it
rarely
gives a good estimate of proportional performance.  Please clarify
to
us why you are using an input measure rather than an output
measure
such as milestones for recognizing revenue.  Refer to SAB 104.


Note 2 - Business Acquisitions and Discontinued Operations

Acquisitions, page 34

11. Please tell us and disclose in future filings the nature of
the
relationship between MyTravel Canada and the Company before and
after
the acquisition.

12. Please clarify to us and in future filings when the Acquired
Companies entered into the three-year agreement with MyTravel
Canada
(i.e. was it before, after or in connection with the acquisition).
In addition, clarify whether any value was ascribed to the
agreement
in connection with the acquisition, and why or why not.  Is the
contract a market value contract?  What consideration was given to
the nature of this agreement being that of a license?

13. Tell us and include in future filings all of the disclosures
required by paragraph 51 of SFAS 141 including the primary reasons
for the acquisition which result in a substantial amount of
goodwill
as required by paragraph 51(b).  In a supplemental response to us
clarify why the acquisitions resulted in such a minor amount
attributed to intangible assets.  In addition, show the components
of
the purchase price of the Acquired Companies as required by
paragraph
51(d) of SFAS 141.

14. In Note 10 on page 40, you indicate that the issuance of
2,500,000 shares of restricted common stock was in connection with
the acquisition.  Please clarify to us and in future filings the
relationship between the issuance and the acquisition.

15. Please tell us and clarify in future filings the nature of the
current liabilities you recognized from the acquisitions.  If they
represent unearned income, describe how you applied the guidance
of
EITF 01-3.

16. What consideration did you give to including the disclosures
required by SFAS 142 related to your intangible assets?


Discontinued Operations, page 35

17. Please clarify to us the form of your "effective 45.5%
beneficial
ownership" in LFSI.  In addition clarify what is meant by
"restoring
the negative carrying value" and the basis in GAAP for recording a
gain on deconsolidation in the statement of operations.  What
consideration did you give to recording this as an equity
transaction?






Note 3 Investments, page 36

18. What consideration did you give to recording other than
temporary
impairment of your investments?  We note that their carrying value
has exceeded fair value for a while.  Refer to EITF 03-1.


Note 6 Goodwill and Other Intangible Assets, page 37

19. We note that you have reported the amortization of unfavorable
airline contract of $2,184,773 in 2004 as a reconciling item to
arrive at cash flow from operating activities in the statement of
cash flows.  Where is this reflected in the statement of
operations?
In addition tell us and expand future disclosure to clarify the
origin and nature of this unfavorable contract.


Note 12 Related Party Transactions, page 44

20. We note that Robert Brooks resigned from the Company`s Board
of
Directors after less than four months of service.  Please advise
us
of the nature of any disagreements which led to his resignation.

21. Please tell us and disclose in future filings how you
accounted
for the shares of common stock and warrants issued to Mr. Brooks.
We
would assume that any difference between the fair value of the
equity
issued and the cash consideration received was accounted for as a
financing cost, as consideration for the waiver of the requirement
to
deliver a letter of credit.

*    *    *    *


We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filing reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your proposed revisions for
future
filings that keys your responses to our comments and provides any
requested supplemental information.  Detailed cover letters
greatly
facilitate our review.  Please file your cover letter on EDGAR.
Please understand that we may have additional comments after
reviewing your responses to our comments.

      You may contact James Webster, Staff Accountant, at (202)
824-
5574 or Linda Van Doorn, Senior Assistant Chief Accountant, at
(202)
942-1964 if you have questions regarding comments on the financial
statements and related matters.



						Sincerely,



Linda Van Doorn
Senior Assistant Chief Accountant


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RCG Companies, Inc.
January 27, 2005


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