EXHIBIT 10.35.1

                               AMENDMENT #1 TO THE
                        EXCLUSIVE DISTRIBUTION AGREEMENT

         THIS  AMENDMENT (the  "AMENDMENT")  is entered into and effective as of
the 22nd day of June,  2004 (the  "AMENDMENT  DATE"),  by and between  Federated
Merchandising Group ("FMG"), an unincorporated  division of Federated Department
Stores, Inc., a Delaware corporation ("FEDERATED"),  and Private Brands, Inc., a
California corporation ("PB").

         WHEREAS, FMG and PB entered into an Exclusive Distribution Agreement on
the 1st day of April, 2003 (the "DISTRIBUTION AGREEMENT"); and

         WHEREAS,  FMG and PB desire to amend certain terms of the  Distribution
Agreement as hereinafter provided.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein,  the receipt and sufficiency of which are hereby  acknowledged
by each party, FMG and PG agree to amend the Distribution Agreement as follows:

         1. All  capitalized  terms not  defined  herein  shall have the meaning
given to them in the Distribution Agreement.

         2.  Section 5.1 of the  Distribution  Agreement  is hereby  amended and
restated as of the Amendment Date to read in its entirety as follows:

"5.1     ANNUAL  MINIMUM  PURCHASES.  In order to preserve its rights under this
         Agreement,  including its rights to exclusivity as set forth in Section
         2.2 and its right of first  refusal  as set forth in Section  2.3,  FMG
         shall order,  during each Contract Year of the Term,  Merchandise  with
         the  minimum  values  (based on the  purchase  price  payable  for such
         Merchandise)   set  forth   below   (the   "ANNUAL   MINIMUM   PURCHASE
         REQUIREMENTS"):

          Contract      Contract       Contact      Contract     Contract Year 5
           Year 1        Year 2        Year 3        Year 4      through Year 10
         -----------   -----------   -----------   -----------   ---------------

         $25 million   $25 million   $40 million   $68 million     $90 million

         The Annual Minimum Purchase  Requirements for each Contract Year of the
         first  Renewal Term shall be equal to the average of the total  amounts
         of Ordered Merchandise during each of Contract Years six through ten of
         the Initial  Term,  provided  that in no event shall the amount used in
         any Contract Year to calculate the Annual Minimum Purchase Requirements
         for the first Renewal Term be less than $90 million.  Furthermore,  the
         Annual  Minimum  Purchase  Requirements  for each  Contract Year of the
         first Renewal Term shall not exceed $108 million. Similarly, the Annual
         Minimum Purchase Requirements for each successive Renewal Term shall be
         equal to the  average  of the  total  amounts  paid by FMG for  Ordered
         Merchandise  during  each of  Contract  Years  six  through  ten of the
         previous Renewal Term,  provided that in no event shall the amount used
         in  any  Contract  Year  to  calculate  the  Annual  Minimum   Purchase
         Requirements





         for the successive Renewal Term be less than $90 million.  Furthermore,
         the Annual Minimum Purchase  Requirements for each Contract Year of the
         second  Renewal  Term shall not exceed  120% of the amount for the last
         Renewal Term.

         Any order placed by FMG and cancelled  prior to the  cancellation  date
         specified  in the  applicable  purchase  order shall  reduce the amount
         ordered by FMG for the period  during  which the order was  placed.  No
         such  reduction  will be  effected  if FMG  cancels an order  after the
         specified cancellation date."

         3. Section 5.3 of the Agreement shall hereafter  specifically reference
Section 5.1 and the Annual Minimum Purchases as set forth in this Amendment #1.

         4.  Except  as  expressly  set  forth  herein,  all  of the  terms  and
conditions of the Distribution  Agreement shall remain in full force and effect.
All references in the Distribution  Agreement to "Agreement" shall mean and be a
reference to such  document as and to the extent it is amended and  supplemented
by this  Amendment,  including  all  exhibits,  schedules  and other  agreements
entered into and/or delivered in connection with this Amendment.

         5. This Amendment may be executed in any number of  counterparts,  each
of  which  is an  original  and  all of  which  taken  together  constitute  one
instrument.  Any  Party  may  execute  this  Amendment  by  executing  any  such
counterpart. This Amendment will be governed by and construed in accordance with
the  laws of the  State of New  York  without  regard  to its  conflict  of laws
principles.

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Exclusive
Distribution  Agreement  or caused the same to be executed by a duly  authorized
person as of the date set forth above.

FEDERATED MERCHANDISING GROUP,            PRIVATE BRANDS, INC.,
A division of Federated Department        a California corporation
Stores, Inc.

By:    /S/ ILLEGIBLE                      By:   /S/ BARRY AVED
      ----------------------------              --------------------------------
Name:                                           Name:    Barry Aved
      ----------------------------              Title:   President
Title:
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