8-K

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): December 23, 2003

United Retail Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	00019774	51-0303670
(State or other jurisdiciton of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

365 West Passaic Street, Rochelle Park, NJ	07662
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number including area code: (201) 845-0880

(Former name or former address, if changed since last report)

Item 5. Other Events and Regulation FD Disclosure

1. On January 7, 2004, United Retail Group, Inc. (the "Company") issued a press release, which is furnished as Exhibit 99 to this report, for publication on January 8, 2004. The percentage changes in comparable store sales mentioned in the press release refer to those stores that were open for at least 12 months. Comparable stores sales may be considered a non-GAAP measure of sales performance but are commonly used by specialty retail industry analysts and investors.
2. On December 23, 2003, the Company entered into an Amendment Agreement, which is filed as Exhibit 10 to this report, to its Financing Agreement with The CIT Group/Business Credit, Inc. ("CIT"). The principal changes resulting from the Amendment Agreement were as follows:

• the Company’s revolving line of credit was increased from $40 million to $50 million of borrowings and letters of credit in the aggregate, subject to the size of the borrowing base
• the asset advance rates for the borrowing base were increased and expanded to include a percentage of eligible receivables from credit card companies
• the variable interest rate per annum on borrowings, if any, was indexed to the amount of Average Excess Availability (as defined in the Amendment Agreement) in a given month and ranges either from the prime rate to 0.75% over the prime rate or from 1.75% over the LIBOR rate to 2.50% over the LIBOR rate, at the Company’s option
• the term of the Amended Financing Agreement was extended to August 15, 2008

The above summary of the Amendment Agreement with CIT is qualified by reference to the text of the Amendment Agreement, which is filed as Exhibit 10 to this report.

The provisions of the CIT Financing Agreement not affected by the Amendment Agreement that remain in force are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company’s Quarterly Report on Form 10-Q for the period ended November 1, 2003.

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 thereunto duly authorized.

UNITED RETAIL GROUP, INC.

By: /s/George R. Remeta
George R. Remeta
Vice Chairman and
Chief Administrative Officer

Date: January 7, 2004

EXHIBIT INDEX

Exhibit No.	Description
10	Amendment, dated December 23, 2003, to Financing Agreement between United Retail Group, Inc. (the "Company") and certain of its subsidiaries and The CIT Group/Business Credit, Inc. (filed)
99	Press Release, dated January 8, 2004, of the Company (furnished)

EX-10

Exhibit No. 10

Amendment Agreement

                                   December 23, 2003

UNITED RETAIL GROUP, INC.
UNITED RETAIL INCORPORATED
CLOUDWALKERS, INC.
365 West Passaic Street
Rochelle Park, NJ 07662

Gentlemen:

We refer to the Financing Agreement between us dated August 15, 1997, as amended (herein the “Financing Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings specified therein unless otherwise specifically defined herein.

This letter is to confirm that pursuant to mutual consent and understanding, effective as of the date hereof, the Financing Agreement shall be, and hereby is, amended as follows:

(1)     Section 1 of the Financing Agreement shall be, and hereby is, amended as follows:

      (a)     the definition of “Anniversary Date” shall be amended in its entirety to read as follows:

      Anniversary Date shall mean August 15, 2008 and the same date in each year thereafter.”

      (b)     the definition of “Line of Credit” and “Letter of Credit Sub-Line” shall be amended by increasing the dollar amount set forth therein from “$40,000,000” to “$50,000,000".

      (c)    the definition of “Early Termination Date” and “Early Termination Fee” shall be amended in their entirety to read as follows:

      “Early Termination Date shall mean the date on which the Companies terminate this Financing Agreement or the Line of Credit which date is prior to an Anniversary Date.”

       “Early Termination Feeshall(a) mean the fee the Agent on behalf of the Lenders is entitled to charge the Companies in the event the Companies terminate the Line of Credit or this Financing Agreement on a date prior to an Anniversary Date; and (b) be determined by multiplying the Revolving Line of Credit by (x) one half of one percent (1/2%) if the Early Termination Date occurs on or before JAN. 1, 2005, (y) one quarter of one percent (1/4%) if the Early Termination Date occurs thereafter but on or before JAN. 1, 2006; and (z) zero percent (0%) if the Early Termination Date occurs thereafter, provided that no such fee shall be due or payable in the event that the Line of Credit or this Financing Agreement is terminated upon the Companies becoming subject to a bankruptcy filing and the Agent provides Debtor-in-Possession financing to the Companies.”

      (d)     the definition of “Borrowing Base” shall be amended in its entirety to read as follows:

       “Borrowing Base shall mean, as to either Company, the sum of (a) (i) 65% of the Book Value of Eligible Inventory of such Company from May 16 of each year through the following October 14 and from December 16 of each year through the following March 14 or (ii) 75% of the Book Value of Eligible Inventory of such Company from March 15 of each year through the following May 15 and October 15 of each year through the following December 15, plus (b) 100% of all Eligible Cash Collateral pledged to Agent by such Company as collateral hereunder (in form and substance satisfactory to Agent), plus (c) 85% of Eligible Credit Card Receivables.

      (e)    the definition of “Accounts” shall be amended by inserting the phrase “payment intangibles and other” in the parenthetical on the second line thereof between the words “all” and “rights” such that the parenthetical shall read:

      “(including but not limited to any and all payment intangibles and other rights to payments under bank and non-bank credit cards)"

      (f)    the following new definitions shall be, and each hereby is added to Section 1 of the Financing Agreement in the proper alphabetical order:

      “Applicable Interest Rate Margin shall mean the increments over the Chase Bank Rate or Libor as determined at the beginning of each month based upon the Average Excess Availability calculated by the Agent as at the end of the prior month and shall be equal to:

Average Excess Availability	Increment Over Chase Bank Rate	Increment Over Libor
Greater than $25,000,000	0%	1.75%
Greater than $15,000,000 but not more than $25,000,000	0.25%	2.00%
Greater than or equal to $7,500,000 But not more than $15,000,000	0.50%	2.25%
Less than $7,500,000	0.75%	2.50%

Notwithstanding the foregoing the Applicable Interest Rate Margin in effect until adjusted as of the end of the next month hereafter shall be 0.50% with respect to the Chase Bank Rate and 2.25% with respect to Libor.”

      Average Excess Availability shall mean the average daily Availability computed by the Agent for each month.”

       “Eligible Credit Card Receivables shall mean Accounts arising from credit card sales, which are outstanding less than four (4) days from date of sale, and which Accounts are subject to a (a) first and exclusive lien and security interest in favor of the Agent and (b) Credit Card Letter, and which Accounts at all times conform to the representations and warranties contained herein and are and continue to be acceptable to the Agent in the exercise of its reasonable discretion.”

      (g)    the definition of “Availability Reserve” shall be amended by the addition thereto at the end thereof prior to the period of the following clause “(c)":

       “and (c) an amount equal to the Companies outstanding and/or potential liability (as reasonably determined by the Agent from time to time) to customs brokers and/or freight forwarders including but not limited to all amounts representing customs, duties, freight or other similar charges together with all other fees and charges due or owing from the Companies to such customs brokers or freight forwarders.”

(2)     Section 4, Paragraph 10 shall be, and hereby is amended in its entirety to read as follows:

      “10.     Notwithstanding any provision to the contrary contained herein Documents of Title with respect to Inventory covered by Letters of Credit shall not be required to be consigned to the Agent and may be consigned to a customs broker reasonably satisfactory to the Agent provided such customs broker has executed and delivered a bailee agreement in form and substance satisfactory to the Agent, unless and until the occurrence of the earlier of (x) the Companies’ Availability being $7,500,000 or less in the aggregate for a period of two (2) consecutive weeks or (y) a Default and/or an Event of Default. Thereafter, all such Documents of Title shall be consigned to the Agent until the Companies’ Availability exceeds $7,500,000 in the aggregate for two (2) consecutive weeks and no Default and/or Event of Default exists, subject to the Agent’s rights under the first sentence of this paragraph 10.”

(3)     Section 7, Paragraphs 1 and 3 of the Financing Agreement shall be, and each hereby is amended in it entirety to read as follows:

      “1.    Interest on the Revolving Loan shall be payable monthly as of the end of each month and shall be an amount equal to (a) the Chase Bank Rate plus the Applicable Interest Rate Margin per annum on the average of the net balances owing by the Companies to the Agent in the Companies’ Revolving Loan Account(s) at the close of each day during such month on balances other than Libor Loans and (b) the applicable Libor plus the Applicable Interest Rate Margin on any Libor Loan, on a per annum basis, on the average of the net balances owing by the Companies to the Agent and/or the Lenders in the Companies’ Revolving Loan Account(s) at the close of each day during such month. In the event of any change in said Chase Bank Rate, the rate under clause (a) above shall change, as of the first of the month following any change, so as to remain equal to the Chase Bank Rate. The rates hereunder shall be calculated based on a 360-day year. The Agent and the Lenders shall be entitled to charge the Companies’ Revolving Loan Account(s) at the rate provided for herein when due until all Obligations have been paid in full.”

      “3.    In consideration of the Letter of Credit Guaranty of the Agent, the Companies shall jointly and severally pay the Agent for the benefit of the Lenders the Letter of Credit Guaranty Fee for each documentary and standby Letter of Credit which shall be an amount equal to the Applicable Interest Rate Margin for Libor Loans minus one percent (1%) per annum, payable monthly, on the face amount of each Letter of Credit less the amount of any and all amounts previously drawn under the Letter of Credit.”

(4)     Section 6, Paragraph 13 of the Financing Agreement shall be, and hereby is, amended by increasing the minimum number of physical counts of Inventory from “once” in each Fiscal Year to “twice” in each Fiscal Year and inserting the following at the end thereof:

      “The Agent shall have the rights at any time to obtain appraisals of the Companies Inventory from appraisers selected and engaged by the Agent but at the Companies’ cost and expense, provided that in the absence of a Default or an Event of Default the Companies shall not be obligated to pay for more than two (2) such appraisals during any consecutive twelve (12) month period.”

(5)     The effectiveness of the foregoing amendments shall be, and hereby is, subject to:

      (a)    your execution and delivery of an Amended and Restated Revolving Loan Promissory Note to reflect the increased Line of Credit in the form of Exhibit A annexed hereto;

      (b)    your payment of (i) an Amendment Fee in the amount of $50,000.00, (ii) an Additional Loan Facility Fee in the amount of $100,000.00, (iii) a Documentation Fee in the amount of $1,350.00 and (iv) all Out-of-Pocket Expenses incurred by the Agent in connection with this agreement, which fees, costs and expenses shall be due and payable in full on the date hereof and may, at our option, be charged to your Revolving Loan Account; and

      (c)     the Agent’s receipt of a secretary’s certificate certifying the adoption of Board of Directors Resolutions authorizing the execution, delivery and performance by the Companies of this agreement and all documents and transactions contemplated hereby;

Except as herein specifically provided, the Financing Agreement remains in full force and effect in accordance with its terms and no other changes in the terms or provisions of the Financing Agreement is intended or implied. If you are in agreement with the foregoing, please so indicate by signing and returning to us the enclosed copy of this letter.

Very truly yours,

THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent and Lender

By: /s/ STEVEN SCHUITT
Title: Vice President
Team Leader

Read and Agreed to:

UNITED RETAIL GROUP, INC.

By: /s/ GEORGE REMETA
Title: VP

UNITED RETAIL INCORPORATED

By: /s/ JON GROSSMAN
Title: VP-Finance

CLOUDWALKERS, INC.

By: /s/ GEORGE REMETA
Title: VP

EX-99

Exhibit No. 99

UNITED RETAIL GROUP ANNOUNCES DECEMBER 2003 SALES
~ December Same Store Sales Increased 2%
~ Company Expanded Revolving Credit Facility

Rochelle Park, New Jersey, January 8, 2004 — United Retail Group, Inc. (NASDAQ-NMS: “URGI”) today announced that total sales were $47.8 million during December 2003 compared with $48.1 million during December 2002.

Comparable store sales increased 2% for the month.

For the fourth quarter to date total sales were $78.6 million compared with $81.3 million in the same period last year.

Comparable store sales decreased 1% for the quarter to date.

For the fiscal year to date, total sales were $373.5 million compared with $407.5 million in the same period last year.

Comparable store sales decreased 7% for the fiscal year to date.

Raphael Benaroya, the Company’s Chairman of the Board, President and Chief Executive Officer, stated: “Customers shopped closer to need this holiday season, particularly in the Northeast, where snow storms impacted store traffic and sales early in the month. The weekly trend in comparable store sales became increasingly favorable as December progressed and this yielded a 2% increase for the month overall.”

Mr.     Benaroya continued: “In addition, we maintained our disciplined approach to inventory management. Inventory levels were significantly lower at the end of December 2003 versus last year.”

The Company separately announced that its revolving credit facility, which is available for seasonal/periodic working capital needs, has been increased and extended. The highlights of the Amended Financing Agreement with The CIT Group/Business Credit, Inc. (“CIT”) include the following:

• the credit line was increased from $40 million to $50 million of borrowings and letters of credit in the aggregate, subject to the size of the borrowing base
• the asset advance rates for the borrowing base were increased and expanded to include a percentage of eligible receivables from credit card companies
• the variable interest rate per annum on borrowings, if any, was indexed to the amount of Average Excess Availability (as defined in the amendment) in a given month and ranges either from the prime rate to 0.75% over the prime rate or from 1.75% over the LIBOR rate to 2.50% over the LIBOR rate, at the Company's option
• the term of the Amended Financing Agreement was extended to August 15, 2008

-more-

The Amended Financing Agreement is collateralized by liens on inventory and proceeds and on receivables from credit card companies but contains no financial covenants except a limit on capital expenditures.

George R. Remeta, the Company’s Vice Chairman and Chief Administrative Officer, commented: “We are pleased that our strong business partnership with CIT enabled us to expand our revolving credit facility. The new arrangement enhances our financial flexibility.”

The Company will release fourth quarter and annual results on Wednesday, February 18, 2004, and invites investors to listen to a broadcast of the Company’s conference call to discuss financial results as well as ongoing corporate developments. The call will be broadcast live over the Internet at 11:30 a.m. (Eastern Standard Time) that day and can be accessed by logging on to http://www.vcall.com.

United Retail Group, Inc. is a specialty retailer of large-size women’s fashion apparel, footwear and accessories featuring AVENUE® brand merchandise. The Company operates 545 AVENUE® stores with 2,366,000 square feet of selling space, as well as the AVENUE.COM website at http://www.avenue.com.

_________________

The above release contains certain brief forward-looking statements concerning the Company’s operations and performance. The Company cautions that any forward-looking statements are summary in nature, involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s control. Accordingly, the Company’s future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. The following factors, among others, could affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this release: war risk; changes in consumer spending patterns, consumer preferences and overall economic conditions; the impact of competition and pricing; changes in weather patterns; the seasonality of the retail industry; risks related to consumer acceptance of the Company’s products and the ability to develop new merchandise; risks associated with the financial performance of the World Financial Network National Bank private label credit card program that is co-branded with the Company’s AVENUE® trade name; increases in interest rates; the ability to retain, hire and train key personnel; risks associated with the ability of the Company’s manufacturers to deliver products in a timely manner; and political instability and other risks associated with foreign sources of production.

The reports filed by the Company with the Securities and Exchange Commission contain additional information on these and other factors that could affect the Company’s operations and performance as well as a summary of the provisions of the CIT Financing Agreement not affected by the amendment reported in this release that remain in force.

The Company does not intend to update the forward-looking statements contained in the above release, which should not be relied upon as current after today’s date.

Contact: George R. Remeta
Vice Chairman and
Chief Administrative Officer
United Retail Group, Inc.
(201)909-2110 Investor Relations
Cara O'Brien/Lila Sharifian
Press: Stephanie Sampiere
Financial Dynamics
(212)850-5600