The footman tells Kate she is to see Mrs. Mantalini. While waiting, she overhears a fight between Mrs. Mantalini and her husband. He is criticizing her for being jealous, warning her it is going to make her an unhappy person. She says she is unhappy and accuses him of flirting with one of the workers. He tells her he could have married two countesses. She remarks that it was just one countess in his original story, but he insists there were two. However, the fact that he married her instead flatters her enough into a reconciliation with an affectionate kiss.
Hearing they are low on money, Mr. Mantalini states they need to get more. He wants to buy a horse so he can parade it around in the park.
Mrs. Mantalini is surprised to see Kate, as the footman neglected to mention her to them. Mr. Mantalini tries to flirt with her. Mrs. Mantalini takes Kate down to see the forewoman. The other workers assess Kate critically.
Mrs. Mantalini wants Kate to start off modeling attire. Miss Knag takes pride in her own petite appearance, though she is no longer young. She models clothes as well. Mrs. Mantalini leaves Kate under Miss Knag’s instruction.
Miss Knag asks Kate what she thinks of her employers. Kate doesn’t know Mrs. Mantalini well enough to say, but she finds the husband odious. Miss Knag is shocked, for she worships both. Kate admits she might have reason to change her mind later.
The other workers comment on Kate wearing black. Kate hates wearing the mourning, for it makes people less friendly towards her, even her own friends. The workers learn her father is dead, and that it was very sudden. Seeing that the questions upset Kate, they stop interrogating her.
Kate and Miss Knag are summoned to model clothes for a rich lady and her daughter. The customers are rude to Kate. They complain about her and don’t want her to wait on them again. Her feelings are hurt, and her spirits are made even lower.
She has to disguise her feelings from her mother, who has hopes that Mrs. Mantalini will make Kate a partner in the business. Kate takes comfort in knowing that Nicholas is established at the school and is very happy—not knowing the truth or recent events.