


                                                                EXHIBIT (10)(S)

MERCHANTS NATIONAL BANK 102 East 3rd Street Post Office Box 248 Winona Minnesota
55987-0248

COMMERCIAL CONTINUING GUARANTY (UNLIMITED)

GUARANTOR:              HAMPSHIRE DESIGNERS, INC.
ADDRESS:                1372 BROADWAY 20TH FLOOR
                        NEW YORK, NY  10018
IDENTIFICATION NO.:     06-0961174

BORROWER:               HAMPSHIRE GROUP, LIMITED
ADDRESS:                215 COMMERCE BLVD.
                        P.O. BOX 2667
                        ANDERSON  SC  29621
IDENTIFICATION NO.:     06-0967107

      1. CONSIDERATION. This Guaranty is being executed to induce Lender
indicated above to enter into one or more loans or other financial
accommodations with or on behalf of Borrower.

      2. GUARANTY.  Guarantor hereby  unconditionally  guarantees the prompt and
full payment and  performance  of  Borrower's  present and future,  joint and/or
several,  direct and  indirect,  absolute and  contingent,  express and implied,
indebtedness,    liabilities,    obligations    and   covenants    (cumulatively
"Obligations") to Lender.  Guarantor's  Obligations under this Guaranty shall be
unlimited and shall include all present or future  Obligations  between Borrower
and  Lender  (for  whatever  purpose),  together  with all  interest  and all of
Lender's  expenses  and costs,  incurred  in  connection  with the  Obligations,
including any amendments, extensions,  modifications,  renewals, replacements or
substitutions thereto.

      3. ABSOLUTE AND  CONTINUING  NATURE OF GUARANTY.  Guarantor's  obligations
under this  Guaranty are absolute  and  continuing  and shall not be affected or
impaired if Lender amends, renews,  extends,  compromises,  exchanges,  fails to
exercise,  impairs or releases any of the obligations belonging to any Borrower,
Co-guarantor  or third party or any of  Lender's  rights  against any  Borrower,
Co-guarantor,  third party, or collateral. In addition,  Guarantor's Obligations
under  this   Guaranty   shall  not  be  affected  or  impaired  by  the  death,
incompetency, termination, dissolution, insolvency, business cessation, or other
financial deterioration of any Borrower, Guarantor, or third party.

      4. DIRECT AND UNCONDITIONAL  NATURE OF GUARANTY.  Guarantor's  Obligations
under this  Guaranty are direct and  unconditional  and may be enforced  without
requiring  Lender to exercise,  enforce,  or exhaust any right or remedy against
any Borrower, Co-guarantor, third party, or collateral.

      5. WAIVER OF NOTICE.  Guarantor  hereby waives notice of the acceptance of
this  Guaranty;  notice of  present  and future  extensions  of credit and other
financial  accommodations by Lender to any Borrower;  notice of the obtaining or
release  of  any  guaranty,  assignment,  or  other  security  for  any  of  the
Obligations  notice of  presentment  for  payment,  demand,  protest,  dishonor,
default, and nonpayment  pertaining to the Obligations and this Guaranty and all
other  notices and demands  pertaining to the  Obligations  and this Guaranty as
permitted by law.

      6. WAIVER OF JURY TRIAL. LENDER AND GUARANTOR  KNOWINGLY,  VOLUNTARILY AND
INTENTIONALLY  WAIVE THE RIGHT  EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY  LITIGATION  BASED ON, OR ARISING OUT OF, UNDER OR IN  CONJUNCTION  WITH THE
PROMISSORY  NOTE,  THIS  GUARANTY  AND ANY OTHER  AGREEMENT  CONTEMPLATED  TO BE
EXECUTED IN CONJUNCTION HEREWITH,  OR ANY COURSE OF CONDUCT,  COURSE OF DEALING,
STATEMENTS  (WHETHER  VERBAL  OR  WRITTEN)  OR  ACTIONS  OF EITHER  PARTY.  THIS
PROVISION IS A MATERIAL  INDUCEMENT  FOR LENDER MAKING THE LOAN EVIDENCED BY THE
PROMISSORY NOTE.

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      7. DEFAULT. Guarantor shall be in default  under this Guaranty in the
event that any Borrower or Guarantor:

               (a) fails to pay any  amount  under  this  Guaranty  or any other
indebtedness  to Lender when due (whether such amount is due by  acceleration or
otherwise);
               (b) fails to perform any obligation or breaches any
warranty or covenant to Lender contained in this Guaranty or any other present
or future written agreement;
               (c) provides or causes any false or misleading signature or
representation to be provided to Lender;
               (d) allows any collateral for the Obligations or this Guaranty to
be destroyed, lost or stolen, or damaged in any material respect;
               (e)  permits the entry or service of any  garnishment,  judgment,
tax  levy,  attachment  or lien  against  Borrower,  Guarantor,  or any of their
property or the Collateral;
               (f)  dies,   becomes   legally   incompetent,   is  dissolved  or
terminated,  ceases  to  operate  its  business,  becomes  insolvent,  makes  an
assignment  for  the  benefit  of  creditors,  or  becomes  the  subject  of any
bankruptcy, insolvency or debtor rehabilitation proceeding; or
               (g) causes Lender to deem itself insecure in good faith for any
reason.

      8. RIGHTS OF LENDER ON DEFAULT.  If there is a default under this
Guaranty, Lender shall be entitled to exercise one or more of the following
remedies without notice or demand (except as required by law):

               (a) to declare Guarantor's Obligations under this Guaranty
immediately due and payable in full;
               (b) to collect the outstanding obligations under this Guaranty
with or without resorting to judicial process;
               (c)  to  set-off  Guarantor's  Obligations  under  this  Guaranty
against any  amounts due to  Guarantor  including,  but not limited to,  monies,
instruments, and deposit accounts maintained with Lender; and
               (d) to exercise  all other  rights  available to Lender under any
other written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order.

      10. WAIVER OF DEFENSES.  The Guarantor  waives all defenses,  claims,  and
discharges of Borrower or any other third party  pertaining to the  Obligations,
except the defense of payment in full. The Guarantor will not assert against the
Lender any  defense of waiver,  release,  discharge  in  bankruptcy,  statute of
limitations res judicata,  statute of frauds,  anti-deficiency  statute,  fraud,
incapacity, illegality or unenforceability which may be available to Borrower or
any  third  party,  whether  or not on  account  of a related  transaction.  The
Guarantor agrees that the Guarantor shall be liable for any deficiency remaining
after foreclosure of any mortgage or security interest securing the Obligations,
whether  or not the  liability  of  Borrower  or any other  third  party for the
deficiency is discharged by statute or judicial decision.

GUARANTOR ACKNOWLEDGES GUARANTOR HAS READ, UNDERSTANDS,  AND AGREES TO THE TERMS
AND  CONDITIONS  OF THIS  AGREEMENT  INCLUDING  THE TERMS AND  CONDITIONS ON THE
REVERSE  SIDE.  GUARANTOR  HAS  EXECUTED  THIS  AGREEMENT  WITH THE INTENT TO BE
LEGALLY  BOUND.  GUARANTOR  ACKNOWLEDGES  RECEIPT  OF  AN  EXACT  COPY  OF  THIS
AGREEMENT.


DATED:  APRIL 1, 1996

GUARANTOR:  HAMPSHIRE DESIGNERS, INC.     GUARANTOR:
/s/ Charles W. Clayton, Vice President
---------------------------------------   -----------------------------------


GUARANTOR:                                GUARANTOR:

---------------------------------------   -----------------------------------


GUARANTOR:                                GUARANTOR:

---------------------------------------   -----------------------------------

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      10.  SUBORDINATION.  The payment of any present or future  indebtedness of
Borrower to Guarantor will be postponed and  subordinated to the payment in full
of any present or future  indebtedness  of Borrower to Lender during the term of
this Agreement. In the event that Guarantor receives any monies, instruments, or
other  remittances to be applied  against  Borrower's  obligations to Guarantor,
Guarantor will hold these funds in trust for Lender and  immediately  endorse or
assign  (if  necessary)  and  deliver  these  monies,   instruments   and  other
remittances  to Lender.  Guarantor  agrees that  Lender  shall be  preferred  to
Guarantor  in any  assignment  for the benefit of  Borrower's  creditors  in any
bankruptcy,  insolvency,  liquidation, or reorganization proceeding commenced by
or against Borrower in any federal or state court.

      11.  INDEPENDENT  INVESTIGATION.  Guarantor's  execution  and  delivery to
Lender  of  this   Guaranty  is  based  solely  upon   Guarantor's   independent
investigation of Borrower's financial condition and not upon any written or oral
representation of Lender in any manner.  Guarantor  assumes full  responsibility
for  obtaining  any  additional   information   regarding  Borrower's  financial
condition  and  Lender  shall not be  required  to  furnish  Guarantor  with any
information of any kind regarding Borrower's financial condition.

      12.  ACCEPTANCE  OF  RISKS.   Guarantor   acknowledges  the  absolute  and
continuing  nature of this  Guaranty and  voluntarily  accepts the full range of
risks  associated  herewith  including,  but  not  limited  to,  the  risk  that
Borrower's financial condition shall deteriorate or the risk that Borrower shall
incur additional Obligations to Lender in the future.

      13. SUBROGATION.  The Guarantor hereby irrevocably waives and releases the
Borrower from all "claims" (as defined in Section 101(5) of the Bankruptcy Code)
to which the  Guarantor is or would,  at any time,  be entitled by virtue of its
obligations under this Guaranty,  including,  without  limitation,  any right of
subrogation  (whether  contractual,  under Section 509 of the Bankruptcy Code or
otherwise),  reimbursement,  contribution,  exoneration or similar right against
the Borrower.

      14.  APPLICATION OF PAYMENTS. Lender will be entitled to apply any
payments or other monies received from Borrower, any third party, or any
collateral against Borrower's present and future obligations to Lender in any
order.

      15. TERMINATION. This Guaranty shall remain in full force and effect until
Lender   executes  and  delivers  to  Guarantor  a  written   release   thereof.
Notwithstanding  the  foregoing,  Guarantor  shall be entitled to terminate  any
guaranty as to Borrower's future Obligations to Lender following any anniversary
of this Guaranty by providing  Lender with ten (10) or more days' written notice
of such termination by  hand-delivery or certified mail.  Notice shall be deemed
given when received by Lender.  Such notice of  termination  shall not affect or
impair  any of the  agreements  and  obligations  of the  Guarantor  under  this
Agreement with respect to any of the  obligations  existing prior to the time of
actual receipt of such notice by Lender, any extensions or renewals thereof, and
any interest on any of the foregoing.

      16.  ASSIGNMENT.  Guarantor  shall not be  entitled  to assign  any of its
rights or obligations  described in this Guaranty without Lender's prior written
consent which may be withheld by Lender in its sole discretion.  Lender shall be
entitled  to assign  some or all of its rights and  remedies  described  in this
Guaranty  without  notice to or the prior  consent of  Guarantor  in any manner.
Unless the Lender shall otherwise  consent in writing,  the Lender shall have an
unimpaired  right prior and  superior to that of any  assignee,  to enforce this
Guaranty for the benefit of the Lender,  as to those Obligations that the Lender
has not assigned.

      17.  MODIFICATION  AND  WAIVER.  The  modification  or  waiver  of  any of
Guarantor's obligations or Lender's rights under this Guaranty must be contained
in a writing  signed  by  Lender.  Lender  may  delay in  exercising  or fail to
exercise any of its rights without causing a waiver of those rights. A waiver on
one occasion shall not constitute a waiver on any other occasion.

      18.  SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon and inure
to the benefit of Guarantor and Lender and their respective successors, assigns,
trustees, receivers, administrators, personal representatives, legatees, and
devisees.

      19.  NOTICE.  Any notice or other communication to be provided under this
Guaranty shall be in writing and sent to the parties at the addresses described
in this Guaranty or such other addresses as the parties may designate in writing
from time to time.

      20.  SEVERABILITY.  If any provision of this Guaranty violates the law or
is unenforceable, the rest of the Guaranty shall remain valid.

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      21.  APPLICABLE LAW.  This Guaranty shall be governed by the laws of the
state indicated in Lender's address. Guarantor consents to the jurisdiction and
venue of any court located in such state in the event of any legal proceeding
under this Guaranty.

      22.  COLLECTION COSTS.   Lender hires an attorney to assist in collecting
any amount due or enforcing any right or remedy under this Guaranty, Guarantor
agrees to pay Lender's attorneys' fees, legal expenses and other costs as
permitted by law.

      23.  REPRESENTATIONS  OF  GUARANTOR.  Guarantor  acknowledges  receipt  of
reasonably  equivalent value in consideration for the execution of this Guaranty
and represents that, after giving effect to this Guaranty, the fair market value
of  Guarantor's  assets  exceeds   Guarantor's  total   liabilities,   including
contingent,   subordinate  and  unliquidated  liabilities,  that  Guarantor  has
sufficient  cash flow to meet debts as they mature,  and that Guarantor does not
have unreasonably small capital.

      24.  MISCELLANEOUS.  This  Guaranty  is  executed  in  connection  with  a
commercial  loan.  Guarantor  will  provide  Lender  with  a  current  financial
statement  upon request.  All  references  to Guarantor in this  Guaranty  shall
include all entities or persons signing this Guaranty. If there is more than one
Guarantor,  their obligations shall be joint and several.  This Guaranty and any
related documents  represent the complete and integrated  understanding  between
Guarantor and Lender pertaining to the terms and conditions of those documents.

      25.  ADDITIONAL TERMS.  THIS GUARANTY SHALL EXPIRE ON APRIL 1, 1997.















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                              CORPORATE RESOLUTION

The   undersigned   Clerk/Secretary/Assistant   Clerk/Secretary   of   Hampshire
Designers, Inc. ("Company"), a corporation duly organized and existing under the
laws of the State of Delaware hereby certifies that, X at a meeting of the Board
of Directors of the Company duly called and held at 1372  Broadway,  City of New
York,  County of New  York,  State of New York on  February  7,  1996,  at which
meeting a quorum was continuously  present ____ pursuant to a unanimous  written
consent of all members of the Board of Directors the following  resolutions were
unanimously adopted, are now in full force and effect and have not been modified
or rescinded in any manner:

     RESOLVED  that  any   _____________________   (  ________________)  of  the
following persons:

     _____ President                      _____ any Assistant Treasurer
       X   any Vice President             _____ Clerk/Secretary
     _____ any Assistant Vice President     X   any Assistant Clerk/Secretary
       X       Treasurer                  _____ Other

(collectively  "Authorized Party") is authorized and empowered to perform one or
more  of the  following  actions  (if  checked)  with  Merchants  National  Bank
("Lender"); for and on behalf of the Company and on such terms and conditions as
any Authorized Party may deem advisable in his sole discretion (The execution of
any agreement,  document or instrument shall constitute a conclusive presumption
that the terms,  covenants and conditions of said documents so signed are agreed
to by and binding on the Company):

  X Open and maintain any safety deposit boxes, lock boxes and escrow,  savings,
checking, depository, or other accounts;

  X Assign, negotiate, endorse and deposit in and to such boxes and accounts any
checks, drafts, notes and other instruments and funds payable to or belonging to
the Company.

  X Withdraw any funds or draw,  sign and deliver in the name of the Company any
check or draft against funds of the Company in such boxes or accounts;

         Implement additional depository and funds transfer services (including,
but no limited to, facsimile signature authorizations, wire transfer agreements,
automated clearing house agreements, and payroll deposit programs);

 X Obtain one or more loans or other forms of  financing  in any amount from the
Lender  (including,  but not limited to, a $ _______  promissory note or line of
credit);

 X    Guaranty the present and future obligations of any third party to the
Lender (including, but not limited to, the obligations of

                                );

FURTHER  RESOLVED,  that with respect to the  foregoing  guaranty,  the Board of
Directors of the Company  hereby  determine that such guaranty may reasonably be
expected to benefit, directly or indirectly, the Company.

         Assign for security purposes, pledge,  hypothecate,  mortgage, or grant
to the Lender a lien,  security  interest,  or other encumbrance upon any of the
Company's  personal  or real  property  (including,  but  not  limited  to,  the
assignments for security purposes, pledges, hypothecations,  mortgages, deeds of
trust,  liens,  security  interests  and  encumbrances  contained  in  the  loan
documents  pertaining  to the  promissory  note,  line of  credit,  or  guaranty
described above);

 X    Endorse to the Lender any checks, drafts, notes, or other instruments
payable to the Company;

 X  Appoint  the  Lender  as the  Company's  attorney-in-fact  for  any  purpose
(including,  but not limited to,  endorsing any checks,  drafts,  notes or other
instruments payable to the Company);

         Assign, convey, sell, lease, or otherwise transfer to the Lender or any
third party any of the Company's personal or real property; and

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X Execute any  document  (including,  but not limited to,  facsimile  signature
authorization  agreements,  wire transfer  agreements,  automated  clearinghouse
agreements,  payroll deposit agreements,  line of credit agreements,  promissory
notes, security agreements,  assignments for security purposes,  mortgages deeds
of trust, assignments of rents, guaranties, powers of attorney, and waivers) and
take or refrain from taking any action on behalf of the Company.

FURTHER RESOLVED,  that any of the foregoing or related  activities taken by any
Authorized  Party prior to the adoption of the preceding  resolutions are hereby
ratified  and  declared  to be biding  obligations  of the Company in a full and
complete manner;

FURTHER  RESOLVED,  that the  authority  and  power of any  Authorized  Party as
provided in the  preceding  resolutions  will  continue in full force and effect
until  the  Board of  Directors  of the  Company  adopt a  resolution  amending,
modifying or revoking one or more of the preceding  resolutions  and a certified
copy of the properly executed resolution is received by the Lender via certified
mail; and

FURTHER RESOLVED,  that the Clerk/Secretary or any Assistant  Clerk/Secretary of
the Company is authorized  to certify the adoption of the foregoing  resolutions
to the Lender, the continuing effect of theses  resolutions,  and the incumbency
of the various parties  authorized to exercise the rights in theses  resolutions
from time to time.

The  undersigned  Clerk/Secretary/Assistant  Cler/Secretary  certifies  that the
following  persons are duly elected  officers or otherwise  authorized to act on
behalf of the Company in the  capacities  set forth below and that the following
original signatures are genuine in all respects:


 NAME                              TITLE                     SIGNATURE
--------                         --------                -----------------

/s/ Charles W. Clayton     V.P., Secretary/Treasurer   /s/Charles W. Clayton
----------------------     -------------------------  ------------------------
/s/ William E. Kennedy, Jr.  Asst. Secretary           /s/William E. Kennedy, Jr
----------------------     -------------------------  ------------------------

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