<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>5</documentType>

    <periodOfReport>2005-12-31</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <form3HoldingsReported>0</form3HoldingsReported>

    <form4TransactionsReported>1</form4TransactionsReported>

    <issuer>
        <issuerCik>0000320333</issuerCik>
        <issuerName>HANOVER DIRECT INC</issuerName>
        <issuerTradingSymbol>HNVD</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001237237</rptOwnerCik>
            <rptOwnerName>FELDMAN STUART</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>712 FIFTH AVE 45TH FL</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>NEW YORK</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10019</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Common Stock Option</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>1.43</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-08-03</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>F</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1167</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-08-03</value>
            </exerciseDate>
            <expirationDate>
                <value>2015-08-02</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>1167</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>6167</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">An option to purchase 3,500 shares of the Common Stock was granted pursuant to the 2002 Stock Plan for Directors on August 3,
2004, but first became exercisable as 1,167 shares on August 3, 2005. The option will become exercisable as to an
additional 1,167 shares on August 3, 2006 and as to the remaining 1,166 shares on August 3, 2007.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Stuart Feldman</signatureName>
        <signatureDate>2006-04-19</signatureDate>
    </ownerSignature>
</ownershipDocument>
