EXHIBIT 5
 
Internal Revenue Service                              Department of the Treasury
District Director
31 Hopkins Plaza
Baltimore, MD 21201-0000
 
Date: January 25, 1995
 
HANOVER DIRECT, INC.
c/o Alicia Alcosser, Richard Howell
Williams, Thacher & Rand, Inc.
630 Third Avenue, 10th Floor
New York, NY 10017
 
       Employer Identification Number 13-0853260
      File Folder Number: 521018891
      C/Person to Contact: EP/EO Customer Service Unit
      Contact Telephone Number: (410) 962-6058
      Plan Name: HANOVER DIRECT SAVINGS AND RETIREMENT PLAN
      Plan Number: 001
 
Dear Applicant:
 
     We  have made  a favorable  determination on  your plan,  identified above,
based on the  information supplied. Please  keep this letter  in your  permanent
records.
 
     Continued  qualification of the plan under  its present form will depend on
its  effect  in  operation.  (See   section  1.401-l(b)(3) of  the  Income   Tax
Regulations.) We will review the status of the plan in operation periodically.
 
     The   enclosed  document  explains  the   significance  of  this  favorable
determination letter, points  out some  features that may  affect the  qualified
status  of  your  employee  retirement plan,  and  provides  information  on the
reporting requirements  for  your  plan.  It also  describes  some  events  that
automatically nullify it. It is very important that you read the publication.
 
     This  letter relates  only to  the status of  your plan  under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
 
     This determination letter  is applicable  for the  amendment(s) adopted  on
October 6, 1994.
 
     This  plan has been mandatorily  disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
 
     This plan satisfies the nondiscrimination in amount requirement of  section
1.401(a)(4)-l(b)(2)  of  the  regulations on  the basis  of a  design-based safe
harbor described in the regulations.
 
     This letter is issued under Rev.  Proc. 93-39 and considers the  amendments
required  by the Tax  Reform Act of  1986 except as  otherwise specified in this
letter.
 
     This plan satisfies the nondiscriminatory current availability requirements
of section 1.401(a)(4)-4(b) of the  regulations with respect to those  benefits,
rights, and features that are currently available to all employees in the plan's
coverage  group. For this  purpose, the plan's coverage  group consists of those
employees treated as currently benefiting for purposes of demonstrating that the
plan satisfies the minimum coverage requirements of section 401(b) of the Code.
 
     This plan qualifies for Extended  Reliance described in the last  paragraph
of  Publication 794 under the caption  'Limitations of a Favorable Determination
Letter'.
 


     The information  on the  enclosed  addendum is  an  integral part  of  this
determination. Please be sure to read and keep it with this letter.
 
     We  have sent a copy of this  letter to your representative as indicated in
the power of attorney.
 
     If you have  questions concerning  this matter, please  contact the  person
whose name and telephone number are shown above.
 
                                          Sincerely yours,
                                          District Director
 
Enclosures:
Publication 794
Reporting & Disclosure Guide for Employee
  Benefit Plans
Addendum
 


     This  determination letter includes  the following Participating Controlled
Group employers: Gump Holding, Inc., Gumps, Inc.