----

Table of Contents

----

----

|   | PENNSYLVANIA                                                        |   | 23-1721355                                |   |
|--------|---------------------------------------------------------------------|--------|-------------------------------------------|--------|
|   | (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification No.) |   |

|   | 3750      STATE ROAD, BENSALEM, PA      19020            |   | (215) 245-9100                                                  |   |
|--------|----------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
|   | (Address      of principal executive offices) (Zip Code) |   | (Registrant’s      telephone number, including Area Code) |   |

| Large      Accelerated Filer  x | Accelerated      Filer  o         |
|-------------------------------------------|---------------------------------------------|
| Non-accelerated      Filer  o   | Smaller      Reporting Company  o |

----

----

----

Table of Contents

----

Table of Contents

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Page   |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART I.  | FINANCIAL      INFORMATION                                                                                                                     | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 1.  | Financial Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Condensed Consolidated Balance      Sheets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|     | May 2, 2009 and January 31,      2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Condensed Consolidated Statements of Operations      and Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|     | Thirteen weeks ended May 2, 2009 and May 3,      2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Condensed Consolidated Statements of Cash      Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Thirteen weeks ended May 2, 2009 and May 3,      2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 4      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Notes to Condensed Consolidated Financial      Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 5      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 2.  | Management’s Discussion and Analysis of Financial      Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 26     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Forward-looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 26     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 29     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Recent Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 30     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 31     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 33     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Liquidity and Capital      Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 39     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 41     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 45     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Impact of Recent Accounting      Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 46     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 3.  | Quantitative and Qualitative Disclosures About      Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 46     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 4.  | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 46     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART II. | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 47     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 1.  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 47     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 1A. | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 47     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 49     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item 6.  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 49     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | SIGNATURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 51     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Exhibit Index                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 52     |

----

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | May      2, |                |   | January      31,   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------------------|--------|--------------------|--------|
| (In      thousands, except share amounts)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2009        |                |   | 2009               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   | (As      Adjusted) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        |                |   |               |   |
| Current      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |                |   |               |   |
| Cash      and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $           | 123,885             |   |               | $      | 93,759 |   |
| Available-for-sale      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |        | 400                 |   |               |   | 6,398 |   |
| Accounts      receivable, net of allowances of $6,125 and $6,018                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |        | 8,021               |   |               |   | 33,300 |   |
| Investment      in asset-backed securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        | 86,998              |   |               |   | 94,453 |   |
| Merchandise      inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | 300,214             |   |               |   | 268,142 |   |
| Deferred      taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 3,439               |   |               |   | 3,439 |   |
| Prepayments      and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        | 173,485             |   |               |   | 155,430 |   |
| Total      current      assets                                                                                                |   |        |   696,442 |   |               |   | 654,921 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |   |   |
| Property,      equipment, and leasehold improvements – at cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        | 1,072,087           |   |               |   | 1,076,972 |   |
| Less      accumulated depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 707,519             |   |               |   | 693,796 |   |
| Net      property, equipment, and leasehold improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        | 364,568             |   |               |   | 383,176 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |   |   |
| Trademarks      and other intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        | 187,184             |   |               |   | 187,365 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        | 23,436              |   |               |   | 23,436 |   |
| Other      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        |   26,348  |   |               |   | 28,243 |   |
| Total      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $           | 1,297,978           |   |               | $      | 1,277,141 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |        |                |   |               |   |   |   |
| Current      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        |                |   |               |   |   |   |
| Accounts      payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $           | 145,815             |   |               | $      | 99,520 |   |
| Accrued      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        | 155,293             |   |               |   | 166,631 |   |
| Current      portion – long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        |   6,463   |   |               |   | 6,746 |   |
| Total      current      liabilities                                                                                           |   |        |  307,571       |   |               |   | 272,897 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |   |   |
| Deferred      taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 47,440              |   |               |   | 46,197 |   |
| Other      non-current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |        | 186,943             |   |               |   | 188,470 |   |
| Long-term      debt, net of debt discount of $66,591 and $72,913                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |        | 223,986             |   |               |   | 232,722 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |                |   |               |   |   |   |
| Stockholders’      equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |        |                |   |               |   |   |   |
| Common      Stock $.10 par value:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        |                |   |               |   |   |   |
| Authorized      – 300,000,000 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        |                |   |               |   |   |   |
| Issued      – 153,890,388 shares and 153,482,368 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |        | 15,389              |   |               |   | 15,348 |   |
| Additional      paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |        | 500,258             |   |               |   | 498,551 |   |
| Treasury      stock at cost – 38,482,213 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        | (347,730            | )      |               |   | (347,730 | ) |
| Accumulated      other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        | 0                   |   |               |   | 5 |   |
| Retained      earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        | 364,121             |   |               |   | 370,681 |   |
| Total      stockholders’      equity                                                                                    |   |        | 532,038             |   |               |   | 536,855 |   |
| Total      liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $           | 1,297,978           |   |               | $      | 1,277,141 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| See      Notes to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |

----

Table of Contents

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                       |   | Thirteen Weeks Ended |              |
|----------------------------------------------------------------------------|--------|----------------------|-------------------|
|                                                                       |   | May      2,          |              |   | May      3, |   |
| (In      thousands, except per share amounts)                              |   | 2009                 |              |   | 2008 |   |
|                                                                       |   |                 |              |   | (As      Adjusted) |   |
|                                                                       |   |                 |              |   |   |   |
| Net      sales                                                             |   | $                    | 538,136           |   |   | $ | 641,346 |   |
|                                                                       |   |                 |              |   |   |   |   |   |
| Cost      of goods sold, buying, catalog, and occupancy expenses           |   |                 | 372,599           |   |   |   | 447,183 |   |
| Selling,      general, and administrative expenses                         |   |                 | 158,102           |   |   |   | 186,795 |   |
| Restructuring      and other charges                                       |   |                 |  8,705       |   |   |   |  3,611 |   |
| Total      operating expenses                                              |   |                 | 539,406           |   |   |   | 637,589 |   |
|                                                                       |   |                 |              |   |   |   |   |   |
| Income/(loss)      from operations                                         |   |                 | (1,270            | ) |   |   | 3,757 |   |
|                                                                       |   |                 |              |   |   |   |   |   |
| Other      income                                                          |   |                 | 198               |   |   |   | 515 |   |
| Gain      on repurchase of 1.125% Senior Convertible Notes                 |   |                 | 4,251             |   |   |   | 0 |   |
| Interest      expense                                                      |   |                 | (5,020            | ) |   |   |   (4,961 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Loss from      continuing operations before income taxes              |   |                 | (1,841            | ) |   |   | (689 | ) |
| Income      tax provision                                                  |   |                 |   4,720 |   |   |   |    260 |   |
|                                                                       |   |                 |              |   |   |   |   |   |
| Loss      from continuing operations                                       |   |                 | (6,561            | ) |   |   | (949 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Loss      from discontinued operations, net of income tax benefit          |   |                 |              |   |   |   |   |   |
| of $10,074 in2008                                                          |   |                 | 0                 |   |   |   | (45,894 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Net      loss                                                              |   |                 | (6,561            | ) |   |   | (46,843 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Other      comprehensive loss, net of tax                                  |   |                 |              |   |   |   |   |   |
| Unrealized      losses on available-for-sale securities, net of income tax |   |                 |              |   |   |   |   |   |
| benefit of $15 in      2008                                                |   |                 | (5                | ) |   |   |  (25 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Comprehensive      loss                                                    |   | $                    | (6,566            | ) |   | $ | (46,868 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Basic      net loss per share:                                             |   |                 |              |   |   |   |   |   |
| Loss      from continuing operations                                       |   | $                    | (.06              | ) |   | $ | (.01 | ) |
| Loss      from discontinued operations                                     |   |                 | (.00              | ) |   |   | (.40 | ) |
| Net      loss                                                              |   | $                    | (.06              | ) |   | $ | (.41 | ) |
|                                                                       |   |                 |              |   |   |   |   |   |
| Diluted      net loss per share:                                           |   |                 |              |   |   |   |   |   |
| Loss      from continuing operations                                       |   | $                    | (.06              | ) |   | $ | (.01 | ) |
| Loss      from discontinued operations                                     |   |                 | (.00              | ) |   |   | (.40 | ) |
| Net      loss                                                              |   | $                    | (.06              | ) |   | $ | (.41 | ) |
|                                                                       |   |
| See      Notes to Condensed Consolidated Financial Statements              |   |

----

Table of Contents

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Thirteen Weeks Ended |                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | May      2,          |                   |   | May      3, |   |
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2009                 |                   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   | (As      Adjusted) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   |   |   |
| Operating      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 |                   |   |   |   |
| Net      loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                    | (6,561                 | ) |   | $ | (46,843 | ) |
| Adjustments      to reconcile net loss to net cash provided by operating      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |                   |   |   |   |   |   |
| Depreciation      and      amortization                                                                                                                                 |   |                 | 20,524                 |   |   |   | 27,096 |   |
| Accretion      of discount on 1.125% Senior Convertible      Notes                                                                                                      |   |                 | 2,884                  |   |   |   | 2,684 |   |
| Estimated      loss on disposition of discontinued      operations                                                                                                      |   |                 | 0                      |   |   |   | 45,251 |   |
| Deferred      income      taxes                                                                                                                                         |   |                 | 1,246                  |   |   |   | (2,022 | ) |
| Stock-based      compensation                                                                                                                                           |   |                 | 1,710                  |   |   |   | 2,898 |   |
| Gain      on repurchase of 1.125% Senior Convertible      Notes                                                                                                         |   |                 | (4,251                 | ) |   |   | 0 |   |
| Write-down      of deferred taxes related to stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                 | 0                      |   |   |   | (263 | ) |
| Write-down      of capital      assets                                                                                                                                  |   |                 | 3,828                  |   |   |   | 1,919 |   |
| Net      loss from disposition of capital      assets                                                                                                                   |   |                 | 143                    |   |   |   | 558 |   |
| Net      loss/(gain) from securitization      activities                                                                                                                |   |                 | 1,225                  |   |   |   | (367 | ) |
| Changes      in operating assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                 |                   |   |   |   |   |   |
| Accounts      receivable,      net                                                                                                                                                          |   |                 | 25,279                 |   |   |   | 25,345 |   |
| Merchandise      inventories                                                                                                                                                                |   |                 | (32,072                | ) |   |   | (39,060 | ) |
| Accounts      payable                                                                                                                                                                       |   |                 | 46,295                 |   |   |   | 30,864 |   |
| Prepayments      and      other                                                                                                                                                             |   |                 | (11,547                | ) |   |   | (3,314 | ) |
| Accrued      expenses and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                 | (13,464                | ) |   |   | 1,414 |   |
| Net      cash provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 |  35,239           |   |   |   | 46,160 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   |   |   |   |   |
| Investing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 |                   |   |   |   |   |   |
| Investment      in capital assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 | (4,702                 | ) |   |   | (22,014 | ) |
| Gross      purchases of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 | 0                      |   |   |   | (12,636 | ) |
| Proceeds      from sales of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                 | 7,471                  |   |   |   | 19,404 |   |
| (Increase)/decrease      in other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |    (449 | ) |   |   | (36 | ) |
| Net      cash provided/(used) by investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   2,320      |   |   |   | (15,282 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   |   |   |   |   |
| Financing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 |                   |   |   |   |   |   |
| Proceeds      from long term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | 0                      |   |   |   | 87 |   |
| Repayments      of long-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | (1,841                 | ) |   |   | (2,271 | ) |
| Repurchase      of 1.125% Senior Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 | (5,631                 | ) |   |   | 0 |   |
| Payments      of deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 | 0                      |   |   |   | (45 | ) |
| Purchases      of treasury stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                 | 0                      |   |   |   | (10,969 | ) |
| Net      proceeds from shares issued under employee stockplans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                 |    39   |   |   |   |    69 |   |
| Net      cash used by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |  (7,433           | ) |   |   | (13,129 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   |   |   |   |   |
| Increase      in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | 30,126                 |   |   |   | 17,749 |   |
| Cash      and cash equivalents, beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                 |   93,759     |   |   |   | 61,842 |   |
| Cash      and cash equivalents, end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                    | 123,885                |   |   | $ | 79,591 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |                   |   |   |   |   |   |
| Non-cash      financing and investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                 |                   |   |   |   |   |   |
| Assets      acquired through capital leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                    | 0                      |   |   | $ | 1,793 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| See      Notes to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |

----

Table of Contents

CHARMING SHOPPES, INC. AND SUBSIDIARIES

----

Table of Contents

| (In      thousands)                                               |   |   |    |
|-------------------------------------------------------------------|--------|--------|---------|
|                                                              |   |   |    |
| Net      sales                                                    |   | $      | 64,679  |   |
|                                                              |   |   |    |   |
| Loss      from discontinued operations                            |   | $      | (55,968 | ) |
| Income      tax benefit                                           |   |   | 10,074  |   |
| Loss      from discontinued operations, net of income tax benefit |   | $      | (45,894 | ) |

----

Table of Contents

| 2004      Stock Award and Incentive Plan           |   |   | 2,248,752 |   |
|----------------------------------------------------|--------|--------|-----------|--------|
| 2003      Non-Employee Directors Compensation Plan |   |   | 100,397   |   |
| 1994      Employee Stock Purchase Plan             |   |   | 712,512   |   |
| 1988      Key Employee Stock Option Plan           |   |   | 113,269   |   |

----

Table of Contents

|                                                                       |   |   |             |   |    |   |   |               |   |   | Aggregate |          |
|----------------------------------------------------------------------------|--------|--------|------------------|--------|---------|--------|--------|--------------------|--------|--------|-----------|---------------|
|                                                                       |   |   |             |   | Average |   |   |               |   |   | Intrinsic |          |
|                                                                       |   | Option |             |   | Option  |   |   | Option      Prices |   |   | Value(1)  |          |
|                                                                       |   | Shares |             |   | Price   |   |   | Per Share          |   |   |      | (000’s) |   |
|                                                                       |   |   |             |   |    |   |   |               |   |   |      |          |   |   |   |   |   |   |   |
| Outstanding      at January 31, 2009                                       |   |   | 3,292,385        |   |    | $      | 5.09   |               |   | $      | 1.00      |          |   |   | – |   |   | $ | 13.84 |   |   | $ | 0 |   |
| Granted      – option price      equal to market price               |   |   | 4,652,300        |   |    |   | 1.66   |               |   |   | 0.99      |          |   |   | – |   |   |   | 2.15 |   |   |   |   |   |
| Canceled/forfeited                                                         |   |   | (301,544         | )      |    |   | 4.53   |               |   |   | 1.00      |          |   |   | – |   |   |   | 6.81 |   |   |   |   |   |
| Exercised                                                                  |   |   |   (434 | )      |    |   | 1.00   |               |   |   | 1.00      |          |   |   | – |   |   |   | 1.00 |   |   |   |   0 | (2) |
| Outstanding      at May 2, 2009                                            |   |   | 7,642,707        |   |    | $      | 3.03   |               |   | $      | 0.99      |          |   |   | – |   |   | $ | 13.84 |   |   | $ | 3,397 |   |
| Exercisable      at May 2, 2009                                            |   |   | 1,493,339        |   |    | $      | 6.40   |               |   | $      | 1.00      |          |   |   | – |   |   | $ | 13.84 |   |   | $ | 0 |   |
| ____________________                                                       |   |
| (1)        Aggregate market value less aggregate exercise price. |   |
| (2)        As of date of exercise.                               |   |

|                                        |   | Thirteen Weeks Ended |   |
|---------------------------------------------|--------|----------------------|--------|
|                                        |   | May      2,          |   |   | May      3, |   |
| (In      thousands)                         |   | 2009                 |   |   | 2008 |   |
|                                        |   |                 |   |   |   |   |
| Total      stock-based compensation expense |   | $                    | 1,710  |   |   | $ | 2,898 |   |

----

Table of Contents

|                                 |   | May      2, |         |   | January      31, |   |
|--------------------------------------|--------|-------------|--------------|--------|------------------|--------|
| (In      thousands)                  |   | 2009        |         |   | 2009             |   |
|                                 |   |        |         |   |             |   |
| Due      from customers              |   | $           | 14,146       |   |             | $      | 39,318 |   |
| Allowance      for doubtful accounts |   |        |  (6,125 | )      |             |   | (6,018 | ) |
| Net      accounts receivable         |   | $           | 8,021        |   |             | $      | 33,300 |   |

|                                                         |   | May      2, |    |   | January      31, |   |
|--------------------------------------------------------------|--------|-------------|---------|--------|------------------|--------|
| (In      thousands)                                          |   | 2009        |    |   | 2009             |   |
|                                                         |   |        |    |   |             |   |
| Trademarks,      tradenames, and internet domain names       |   | $           | 187,132 |   |             | $      | 187,132 |   |
| Customer      relationships                                  |   |        | 2,872   |   |             |   | 2,872 |   |
| Total      at cost                                           |   |        | 190,004 |   |             |   | 190,004 |   |
| Less      accumulated amortization of customer relationships |   |        | 2,820   |   |             |   | 2,639 |   |
| Net      trademarks and other intangible assets              |   | $           | 187,184 |   |             | $      | 187,365 |   |

----

Table of Contents

|                                                              |   | May      2, |    |   | January      31,   |   |
|-------------------------------------------------------------------|--------|-------------|---------|--------|--------------------|--------|
| (In      thousands)                                               |   | 2009        |    |   | 2009               |   |
|                                                              |   |        |    |   | (As      Adjusted) |   |
|                                                              |   |        |    |   |               |   |
| 1.125%      Senior Convertible Notes, due May 2014                |   | $           | 261,500 |   |               | $      | 275,000 |   |
| Capital      lease obligations                                    |   |        | 12,959  |   |               |   | 14,041 |   |
| 6.07%      mortgage note, due October 2014                        |   |        | 10,244  |   |               |   | 10,419 |   |
| 6.53%      mortgage note, due November 2012                       |   |        | 4,900   |   |               |   | 5,250 |   |
| 7.77%      mortgage note, due December 2011                       |   |        | 7,079   |   |               |   | 7,249 |   |
| Other      long-term debt                                         |   |        | 358     |   |               |   |  422 |   |
| Total      long-term debt principal                               |   |        | 297,040 |   |               |   | 312,381 |   |
| Less      unamortized discount on 1.125% Senior Convertible Notes |   |        | (66,591 | )      |               |   | (72,913 | ) |
| Long-term      debt – carrying value                        |   |        | 230,449 |   |               |   | 239,468 |   |
| Current      portion                                              |   |        | (6,463  | )      |               |   |   (6,746 | ) |
| Net      long-term debt                                           |   | $           | 223,986 |   |               | $      | 232,722 |   |

----

Table of Contents

|                                                        |   | May      2, |                |   | January      31, |   |
|-------------------------------------------------------------|--------|-------------|---------------------|--------|------------------|--------|
| (In      thousands)                                         |   | 2009        |                |   | 2009             |   |
|                                                        |   |        |                |   |             |   |
| Equity      component of 1.125% Senior Convertible Notes    |   | $           | 91,715              |   |             | $      | 91,715 |   |
|                                                        |   |        |                |   |             |   |   |   |
| Principal      amount of 1.125% Senior Convertible Notes    |   | $           | 261,500             |   |             | $      | 275,000 |   |
| Unamortized      discount                                   |   |        |        (66,591 | )      |             |   |  (72,913 | ) |
| Liability      component of 1.125% Senior Convertible Notes |   | $           | 194,909             |   |             | $      | 202,087 |   |

|                                                                                                                                                                                                                                                           |   | As      Previously |      |   | Other          |   |    | FSP      APB 14-1 |   |    | As       |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|----------------|--------|---------|-------------------|--------|---------|----------|--------|
| (In      thousands)                                                                                                                                                                                                                                            |   | Reported           |      |   | Adjustments(1) |   |    | Adjustments       |   |    | Adjusted |   |
|                                                                                                                                                                                                                                                           |   |               |      |   |           |   |    |              |   |    |     |   |
| Other      assets                                                                                                                                                                                                                                              |   | $                  | 30,167    |   |           |   |    |              | $      | (1,924  | )(2)     |   | $ | 28,243 |   |
| Deferred      taxes                                                                                                                                                                                                                                            |   |               | 4,066     |   |           |   |    |              |   | (627    | )(3)     |   |   | 3,439 |   |
| Total      assets                                                                                                                                                                                                                                              |   |               | 1,279,692 |   |           |   |    |              |   | (2,551  | )        |   |   | 1,277,141 |   |
|                                                                                                                                                                                                                                                           |   |               |      |   |           |   |    |              |   |    |     |   |   |   |   |
| Deferred      taxes                                                                                                                                                                                                                                            |   |               | 46,824    |   |           |   |    |              |   | (627    | )(3)     |   |   | 46,197 |   |
| Long-term      debt                                                                                                                                                                                                                                            |   |               | 305,635   |   |           |   |    |              |   | (72,913 | )(4)     |   |   | 232,722 |   |
| Additional      paid-in capital                                                                                                                                                                                                                                |   |               | 411,623   |   |           | $      | 30,208  |              |   |    | 56,720   | (5)    |   |   | 498,551 |   |
| Retained      earnings                                                                                                                                                                                                                                         |   |               | 386,620   |   |           |   | (30,208 | )                 |   |    | 14,269   | (6)    |   |   | 370,681 |   |
| Total      stockholders’ equity                                                                                                                                                                                                                          |   |               | 465,866   |   |           |   |    |              |   |    | 70,989   |   |   |   | 536,855 |   |
| Total      liabilities and stockholders’ equity                                                                                                                                                                                                          |   |               | 1,279,692 |   |           |   |    |              |   |    | (2,551   | )      |   |   | 1,277,141 |   |
| ____________________                                                                                                                                                                                                                                           |   |
| (1)       Correction of accounting for deferred taxes related to purchased call      option (see “Note 1.      Condensed Consolidated Financial Statements; Adjustment of Prior-Year      Amounts for Change in Accounting Principle” above). |   |
| (2)       Cumulative adjustment to debt issuance costs related to 1.125%      Notes.                                                                                                                                                                      |   |
| (3)       Reallocation of deferred taxes.                                                                                                                                                                                                                 |   |
| (4)       Unamortized discount as of January 31, 2009.                                                                                                                                                                                                    |   |
| (5)       Equity component of 1.125% Notes and debt issuance costs.                                                                                                                                                                                       |   |
| (6)       Cumulative impact of amortization of debt discount and amortization of      equity component of debt issuance costs, net of tax benefit.                                                                                                        |   |

----

Table of Contents

|                               |   | Thirteen Weeks Ended |   |
|------------------------------------|--------|----------------------|--------|
|                               |   | May      2,          |   |   | May      3, |   |
| (Dollars      in thousands)        |   | 2009                 |   |   | 2008 |   |
|                               |   |                 |   |   |   |   |
| Contractual      interest expense  |   | $                    | 774    |   |   | $ | 774 |   |
| Amortization      of debt discount |   |                 | 2,884  |   |   |   | 2,684 |   |
| Total      interest expense        |   | $                    | 3,658  |   |   | $ | 3,458 |   |
|                               |   |                 |   |   |   |   |   |   |
| Effective      interest rate       |   |                 | 7.4%   |   |   |   | 7.4% |   |

|                                          |   | Before   |   |   | Adoption      of |   |   | After    |   |
|-----------------------------------------------|--------|----------|--------|--------|------------------|--------|--------|----------|--------|
| (In      thousands, except per share amounts) |   | Adoption |   |   | FSP APB 14-1     |   |   | Adoption |   |
|                                          |   |     |   |   |             |   |   |     |   |
| Thirteen      weeks ended May 2, 2009         |   |     |   |   |             |   |   |     |   |
| Interest      expense                         |   | $        | 2,228  |   |             | $      | 2,792  | (1)      |   | $ | 5,020 |   |
| Income      tax provision                     |   |     | 4,720  |   |             |   | 0      |     |   |   | 4,720 |   |
| Loss      from continuing operations          |   |     | (3,769 | )      |             |   | (2,792 | )        |   |   | (6,561 | ) |
| Net      loss                                 |   |     | (3,769 | )      |             |   | (2,792 | )        |   |   | (6,561 | ) |
| Basic      net loss per share(3)              |   |     | (0.03  | )      |             |   | (0.02  | )        |   |   | (0.06 | ) |
| Diluted      net loss per share(3)            |   |     | (0.03  | )      |             |   | (0.02  | )        |   |   | (0.06 | ) |

|                                                                                                                                                                |   | As      Previously |    |   | Adoption      of |   |   | As       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|--------|----------|--------|
|                                                                                                                                                                |   | Reported           |    |   | FSP APB 14-1     |   |   | Adjusted |   |
|                                                                                                                                                                |   |               |    |   |             |   |   |     |   |
| Thirteen      weeks ended May 3, 2008                                                                                                                               |   |               |    |   |             |   |   |     |   |
| Interest      expense                                                                                                                                               |   | $                  | 2,369   |   |             | $      | 2,592  | (1)      |   | $ | 4,961 |   |
| Income      tax provision                                                                                                                                           |   |               | 1,246   |   |             |   | (986   | )(2)     |   |   | 260 |   |
| Income/(loss)      from continuing operations                                                                                                                       |   |               | 657     |   |             |   | (1,606 | )        |   |   | (949 | ) |
| Net      loss                                                                                                                                                       |   |               | (45,237 | )      |             |   | (1,606 | )        |   |   | (46,843 | ) |
| Basic      net income/(loss) per share(3):                                                                                                                          |   |               |    |   |             |   |   |     |   |   |   |   |
| Continuing    operations                                                                                                                                            |   |               | 0.01    |   |             |   | (0.01  | )        |   |   | (0.01 | ) |
| Net loss                                                                                                                                                            |   |               | (0.39   | )      |             |   | (0.01  | )        |   |   | (0.41 | ) |
| Diluted      net income/(loss) per share(3):                                                                                                                        |   |               |    |   |             |   |   |     |   |   |   |   |
| Continuing    operations                                                                                                                                            |   |               | 0.01    |   |             |   | (0.01  | )        |   |   | (0.01 | ) |
| Net loss                                                                                                                                                            |   |               | (0.39   | )      |             |   | (0.01  | )        |   |   | (0.41 | ) |
| ____________________                                                                                                                                                |   |
| (1)        Amortization of the debt discount related to the 1.125% Notes less      amortization of debt issue costs related to the equity      component. |   |
| (2)        Tax effect of adoption of FSP APB 14-1.                                                                                                        |   |
| (3)        Results do not add across due to rounding.                                                                                                     |   |

----

Table of Contents

|                                                                                                                                                                                                                                                                                 |   | Thirteen         |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|
|                                                                                                                                                                                                                                                                                 |   | Weeks      Ended |    |
|                                                                                                                                                                                                                                                                                 |   | May      2,      |    |
| (Dollars      in thousands)                                                                                                                                                                                                                                                          |   | 2009             |    |
|                                                                                                                                                                                                                                                                                 |   |             |    |
| Total      stockholders’ equity, beginning of period (as adjusted)                                                                                                                                                                                                             |   | $                | 536,855 | (1) |
| Net      loss                                                                                                                                                                                                                                                                        |   |             | (6,561  | ) |
| Issuance      of common stock (408,020 shares), net of shares withheld for payroll      taxes                                                                                                                                                                                        |   |             | 39      |   |
| Stock-based      compensation                                                                                                                                                                                                                                                        |   |             | 1,710   |   |
| Unrealized      losses on available-for-sale securities                                                                                                                                                                                                                              |   |             | (5      | ) |
| Total      stockholders’ equity, end of period                                                                                                                                                                                                                                 |   | $                | 532,038 |   |
| ____________________                                                                                                                                                                                                                                                                 |   |
| (1)        We adopted the provisions of FSP APB 14-1 retrospectively as of the      beginning of Fiscal 2010 and recognized a net increase in stockholders’      equity of $70,989,000 as of January 31, 2009 (see “Note 4. Long-term Debt”      above). |   |

----

Table of Contents

|                                                                                                                                                                                               |   | Thirteen Weeks      Ended |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|
|                                                                                                                                                                                               |   | May      2,               |    |   | May      3, |   |
| (In      thousands, except per share amounts)                                                                                                                                                      |   | 2009                      |    |   | 2008 |   |
|                                                                                                                                                                                               |   |                      |    |   | (As      Adjusted) |   |
|                                                                                                                                                                                               |   |                      |    |   |   |   |
| Basic      weighted average common shares outstanding                                                                                                                                              |   |                      | 115,180 |   |   |   | 114,588 |   |
| Dilutive effect of stock options, stock      appreciation rights, and awards(1)                                                                                                               |   |                      | 0       |   |   |   | 0 |   |
| Diluted      weighted average common shares and equivalents outstanding                                                                                                                            |   |                      | 115,180 |   |   |   | 114,588 |   |
|                                                                                                                                                                                               |   |                      |    |   |   |   |   |   |
| Loss      from continuing operations                                                                                                                                                               |   | $                         | (6,561  | ) |   | $ | (949 | ) |
| Loss      from discontinued operations, net of income tax benefit                                                                                                                                  |   |                      |  0 |   |   |   | (45,894 | ) |
| Net      loss used to determine diluted net loss per share                                                                                                                                    |   | $                         | (6,561  | ) |   | $ | (46,843 | ) |
|                                                                                                                                                                                               |   |                      |    |   |   |   |   |   |
|                                                                                                                                                                                               |   |                      |    |   |   |   |   |   |
| Options      with weighted average exercise price greater than market      price,                                                                                                                  |   |                      |    |   |   |   |   |   |
|     excluded from      computation of net loss per      share:                                                                                                                 |   |                      |    |   |   |   |   |   |
| Number      of shares                                                                                                                                                                              |   |                      | – | (1) |   |   | – | (1) |
| Weighted      average exercise price per share                                                                                                                                                     |   |                      | – | (1) |   |   | – | (1) |
| ____________________                                                                                                                                                                               |   |
| (1)        Stock options, stock appreciation rights, and awards are excluded from the      computation of diluted net loss per share as their effect would have been      anti-dilutive. |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | May      2,                |   | January      31,          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|--------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2009                       |   | 2009                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                       |   |                      |
| Payment      rate                                                                                                                           | 11.8      – 14.3%    |   | 12.1      – 14.6%   |
| Residual      cash flows discount      rate                                                                                                 | 15.5      – 16.5%    |   | 15.5      – 16.5%   |
| Net      credit loss      percentage                                                                                                        | 7.25      – 12.06%   |   | 6.75      – 11.75%  |
| Average      life of receivables      sold                                                                                                  | 0.6      – 0.7 years |   | 0.6      – 0.7years |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | May      2, |   |   | January      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|------------------|--------|
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2009        |   |   | 2009             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |   |   |             |   |
| Trading      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        |   |   |             |   |
| I/O      Strip                                                                                                                                                      |   | $           | 17,971 |   |             | $      | 19,298 |   |
| Retained      interest (primarily collateralized      cash)                                                                                                         |   |        | 19,107 |   |             |   | 23,755 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |   |   |             |   |   |   |
| Available-for-sale      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |             |   |   |   |
| Ownership      interest                                                                                                                                             |   |        | 49,920 |   |             |   | 51,400 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |   |   |             |   |   |   |
| Investment      in asset-backed      securities                                                                                                                     |   | $           | 86,998 |   |             | $      | 94,453 |   |

----

Table of Contents

----

Table of Contents

|                                                                                                                                                                                                                                                                              |   | Retail |    |   | Direct-to- |   |   | Corporate      |   |   |         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                                                                               |   | Stores |    |   | Consumer   |   |   | and      Other |   |   | Consolidated |   |
|                                                                                                                                                                                                                                                                              |   |   |    |   |       |   |   |           |   |   |         |   |
| Thirteen      weeks ended May 2, 2009                                                                                                                                                                                                                                             |   |   |    |   |       |   |   |           |   |   |         |   |
| Net      sales                                                                                                                                                                                                                                                                    |   | $      | 515,630 |   |       | $      | 19,455 |           |   | $      | 3,051        |   |   | $ | 538,136 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                |   |   | 12,690  |   |       |   | 41     |           |   |   | 7,793        |   |   |   | 20,524 |   |
| Income      before interest and taxes                                                                                                                                                                                                                                             |   |   | 38,551  |   |       |   | (3,437 | )              |   |   | (31,935      | )(1)   |   |   | 3,179 |   |
| Interest      expense                                                                                                                                                                                                                                                             |   |   |    |   |       |   |   |           |   |   | (5,020       | )      |   |   | (5,020 | ) |
| Income      tax provision                                                                                                                                                                                                                                                         |   |   |    |   |       |   |   |           |   |   | (4,720       | )      |   |   | (4,720 | ) |
| Net      loss                                                                                                                                                                                                                                                                     |   |   | 38,551  |   |       |   | (3,437 | )              |   |   | (41,675      | )      |   |   | (6,561 | ) |
| Capital      expenditures                                                                                                                                                                                                                                                         |   |   | 3,607   |   |       |   | 0      |           |   |   | 1,095        |   |   |   | 4,702 |   |
|                                                                                                                                                                                                                                                                              |   |   |    |   |       |   |   |           |   |   |         |   |   |   |   |   |
| Thirteen      weeks ended May 3, 2008 (As adjusted)                                                                                                                                                                                                                               |   |   |    |   |       |   |   |           |   |   |         |   |   |   |   |   |
| Net      sales                                                                                                                                                                                                                                                                    |   | $      | 611,291 |   |       | $      | 26,946 |           |   | $      | 3,109        |   |   | $ | 641,346 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                |   |   | 13,846  |   |       |   | 38     |           |   |   | 12,471       |   |   |   | 26,355 | (3) |
| Income      before interest and taxes                                                                                                                                                                                                                                             |   |   | 43,404  |   |       |   | (4,199 | )              |   |   | (34,933      | )(2)   |   |   | 4,272 |   |
| Interest      expense                                                                                                                                                                                                                                                             |   |   |    |   |       |   |   |           |   |   | (4,961       | )      |   |   | (4,961 | ) |
| Income      tax provision                                                                                                                                                                                                                                                         |   |   |    |   |       |   |   |           |   |   | (260         | )      |   |   | (260 | ) |
| Loss      from continuing operations                                                                                                                                                                                                                                              |   |   | 43,404  |   |       |   | (4,199 | )              |   |   | (40,154      | )      |   |   | (949 | ) |
| Capital      expenditures                                                                                                                                                                                                                                                         |   |   | 18,721  |   |       |   | 0      |           |   |   | 2,972        |   |   |   | 21,693 | (3) |
| ____________________                                                                                                                                                                                                                                                              |   |
| (1)        Includes restructuring and other charges of $8,705 (see “Note 11. Restructuring and      Other Charges” below) and a gain on repurchase of 1.125% Senior      Convertible Notes of $4,251 (see “Note 4. Long-term Debt”      above). |   |
| (2)        Includes restructuring and other charges of $3,611 (see “Note 11. Restructuring      and Other Charges” below).                                                                                                                             |   |
| (3)        Excludes $741 of depreciation and amortization and $321 of capital      expenditures related to our discontinued operations.                                                                                                                                 |   |

----

Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   | Total            |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|---------------------|--------|--------|------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | Costs            |   |   | Costs      Incurred |   |   | Estimated  |   |   | Estimated/       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | Incurred         |   |   | for      Thirteen   |   |   | Remaining  |   |   | Actual           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | as      of       |   |   | Weeks      Ended    |   |   | Costs      |   |   | Costs      as of |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | January      31, |   |   | May      2,         |   |   | to      be |   |   | May      2,      |   |
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009             |   |   | 2009                |   |   | Incurred   |   |   | 2009             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |
| Fiscal      2008 Announcements                                                                                                                                                                                                                                                                                                                                                                                 |   |             |   |   |                |   |   |       |   |   |             |   |
| Relocation      of CATHERINES operations:                                                                                                                                                                                                                                                                                                                                                                      |   |             |   |   |                |   |   |       |   |   |             |   |
| Severance      and retention costs                                                                                                                                                                                                                                                                                                                                                                             |   | $                | 2,079  |   |                | $      | 0      |       |   | $      | 0                |   |   | $ | 2,079 |   |
| Non-cash      write down and accelerated                                                                                                                                                                                                                                                                                                                                                                       |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Depreciation                                                                                                                                    |   |             | 3,808  |   |                |   | 0      |       |   |   | 0                |   |   |   | 3,808 |   |
| Relocation      and other charges                                                                                                                                                                                                                                                                                                                                                                              |   |             | 1,166  |   |                |   | 37     |       |   |   | 0                |   |   |   | 1,203 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Closing      of under-performing and PETITE                                                                                                                                                                                                                                                                                                                                                                    |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| SOPHISTICATE      full line stores:                                                                                                                                                                                                                                                                                                                                                                            |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Non-cash      accelerated depreciation                                                                                                                                                                                                                                                                                                                                                                         |   |             | 691    |   |                |   | 0      |       |   |   | 0                |   |   |   | 691 |   |
| Store      lease termination charges                                                                                                                                                                                                                                                                                                                                                                           |   |             | 6,909  |   |                |   | 486    |       |   |   | 672              |   |   |   | 8,067 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Severance      and retention costs related to                                                                                                                                                                                                                                                                                                                                                                  |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
|     the      elimination of      positions                                                         |   |             | 1,244  |   |                |   | 0      |       |   |   | 0                |   |   |   | 1,244 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Fiscal      2009 Announcements                                                                                                                                                                                                                                                                                                                                                                                 |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Severance      for departure of former CEO                                                                                                                                                                                                                                                                                                                                                                     |   |             | 9,446  |   |                |   | 42     |       |   |   | 100              |   |   |   | 9,588 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Shutdown      of LANE BRYANT WOMAN                                                                                                                                                                                                                                                                                                                                                                             |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Catalog:                                                                                                                                                                                                                                                                                                                                                                                                       |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Severance      and retention      costs                                                                                |   |             | 1,557  |   |                |   | 251    |       |   |   | 369              |   |   |   | 2,177 |   |
| Non-cash      accelerated depreciation                                                                                                                                                                                                                                                                                                                                                                         |   |             | 934    |   |                |   | 936    |       |   |   | 0                |   |   |   | 1,870 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Severance      and retention costs related to                                                                                                                                                                                                                                                                                                                                                                  |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
|     the      elimination of      positions                                                         |   |             | 3,873  |   |                |   | 148    |       |   |   | 0                |   |   |   | 4,021 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Non-core      misses apparel assets:                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Non-cash      accelerated depreciation                                                                                                                                                                                                                                                                                                                                                                         |   |             | 2,968  |   |                |   | 2,892  |       |   |   | 1,882            |   |   |   | 7,742 |   |
| Other      costs                                                                                                       |   |             | 420    |   |                |   | 0      |       |   |   | 7,000            |   |   |   | 7,420 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| Transformational      initiatives                                                                                      |   |             | 2,563  |   |                |   | 3,913  |       |   |   | 2,925            |   |   |   | 9,401 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                |   |   |       |   |   |             |   |   |   |   |   |
| figure      magazine shutdown costs                                                                                                                                                                                                                                                                                                                                                                            |   |             | 819    |   |                |   | 0      |       |   |   | 0                |   |   |   | 819 |   |
| Total                                                                                                                  |   | $                | 38,477 |   |                | $      | 8,705  |       |   | $      | 12,948           |   |   | $ | 60,130 |   |

----

Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   | Costs      Incurred |   |   |        |   |   |        |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|---------------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | Accrued         |   |   | for      Thirteen   |   |   |        |   |   | Accrued     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | as      of      |   |   | Weeks      Ended    |   |   |        |   |   | as      of  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   | January      31 |   |   | May      2,         |   |   | Payments/   |   |   | May      2, |   |
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009(1)         |   |   | 2009                |   |   | Settlements |   |   | 2009(1)     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |
| Fiscal      2008 Announcements                                                                                                                                                                                                                                                                                                                                                                                 |   |            |   |   |                |   |   |        |   |   |        |   |
| Relocation      of CATHERINES operations:                                                                                                                                                                                                                                                                                                                                                                      |   |            |   |   |                |   |   |        |   |   |        |   |
| Relocation      and other charges                                                                                                                                                                                                                                                                                                                                                                              |   | $               | 0      |   |                | $      | 37     |        |   | $      | 37          |   |   | $ | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Closing      of under-performing and PETITE                                                                                                                                                                                                                                                                                                                                                                    |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| SOPHISTICATE      full line stores:                                                                                                                                                                                                                                                                                                                                                                            |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Store      lease termination charges                                                                                                                                                                                                                                                                                                                                                                           |   |            | 1,687  |   |                |   | 486    |        |   |   | 187         |   |   |   | 1,986 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Fiscal      2009 Announcements                                                                                                                                                                                                                                                                                                                                                                                 |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Severance      for departure of former CEO                                                                                                                                                                                                                                                                                                                                                                     |   |            | 5,453  |   |                |   | 42     |        |   |   | 0           |   |   |   | 5,495 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Shutdown      of LANE BRYANT WOMAN                                                                                                                                                                                                                                                                                                                                                                             |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Catalog:                                                                                                                                                                                                                                                                                                                                                                                                       |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Severance      and retention costs                                                                                                                                                                                                                                                                                                                                                                             |   |            | 1,490  |   |                |   | 251    |        |   |   | 175         |   |   |   | 1,566 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Severance      and retention costs related to                                                                                                                                                                                                                                                                                                                                                                  |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
|     the      elimination of      positions                                                         |   |            | 2,948  |   |                |   | 148    |        |   |   | 1,573       |   |   |   | 1,523 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Non-core      misses apparel assets:                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Other      costs                                                                                                                                |   |            | 420    |   |                |   | 0      |        |   |   | 0           |   |   |   | 420 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| Transformational      initiatives                                                                                      |   |            | 1,379  |   |                |   | 3,913  |        |   |   | 1,917       |   |   |   | 3,375 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |                |   |   |        |   |   |        |   |   |   |   |   |
| figure      magazine shutdown costs                                                                                                                                                                                                                                                                                                                                                                            |   |            | 819    |   |                |   | 0      |        |   |   | 613         |   |   |   | 206 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                          |   | $               | 14,196 |   |                | $      | 4,877  |        |   | $      | 4,502       |   |   | $ | 14,571 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (1)       Included in “Accrued expenses” in the accompanying consolidated balance      sheets.                                                                                                                                                                                                                                                                                                |   |

----

Table of Contents

| ● | Level      1 – Quoted market prices in active markets for identical assets or      liabilities.                 |
|---------|-----------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                  |
| ● | Level      2 – Observable market-based inputs or unobservable inputs that are      corroborated by market data. |
|    |                                                                                                                  |
| ● | Level      3 – Unobservable inputs that are not corroborated by market      data.                               |

|                                                                                                                                                                                                                                     |   | Balance     |   |   |                   |   |   |       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                     |   | May      2, |   |   | Fair Value Method Used |   |
| (In      thousands)                                                                                                                                                                                                                      |   | 2009        |   |   | Level 2                |   |   | Level 3(1) |   |
|                                                                                                                                                                                                                                     |   |        |   |   |                   |   |   |       |   |
| Assets                                                                                                                                                                                                                                   |   |        |   |   |                   |   |   |       |   |
| Available-for-sale      securities(2)                                                                                                                                                                                                    |   | $           | 400    |   |                   | $      | 400    |       |   |   |   |
| Certificates      and retained interests in securitized receivables                                                                                                                                                                      |   |        | 86,998 |   |                   |   |   |       |   | $ | 86,998 |   |
|                                                                                                                                                                                                                                     |   |        |   |   |                   |   |   |       |   |   |   |   |
| Liabilities                                                                                                                                                                                                                              |   |        |   |   |                   |   |   |       |   |   |   |   |
| Servicing      liability                                                                                                                                                                                                                 |   |        | 2,944  |   |                   |   |   |       |   |   | 2,944 |   |
| ____________________                                                                                                                                                                                                                     |   |
| (1)       Fair value is estimated based on internally-developed models or      methodologies utilizing significant inputs that are unobservable from      objective sources.                                                        |   |
| (2)       Unrealized gains and losses on our available-for-sale securities are      included in stockholders’ equity until realized and realized gains and      losses are recognized in income when the securities are sold. |   |

----

Table of Contents

|                                                                |   | Retained  |   |   | Servicing |   |
|---------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|
| (In      thousands)                                                 |   | Interests |   |   | Liability |   |
|                                                                |   |      |   |   |      |   |
| Balance,      January 31, 2009                                      |   | $         | 94,453 |   |      | $      | 3,046 |   |
| Additions      to I/O strip and servicing liability                 |   |      | 5,979  |   |      |   | 1,051 |   |
| Net      reductions to other retained interests                     |   |      | (4,647 | )      |      |   |   |   |
| Reductions      and maturities of QSPE certificates                 |   |      | (1,481 | )      |      |   |   |   |
| Amortization      of the I/O strip and servicing liability          |   |      | (7,383 | )      |      |   | (1,174 | ) |
| Valuation      adjustments to the I/O strip and servicing liability |   |      | 77     |   |      |   | 21 |   |
| Balance,      May 2, 2009                                           |   | $         | 86,998 |   |      | $      | 2,944 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

Item 2. Management’s Discussion and Analysis of FinancialCondition and Results of Operations

FORWARD-LOOKING STATEMENTS

| ●  | Our      business is dependent upon our ability to accurately predict rapidly      changing fashion trends, customer preferences, and other fashion-related      factors, which we may not be able to successfully accomplish in the      future.                                                                                                                                          |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                                                                                                                                                                       |
| ●       | The      women’s specialty retail apparel and direct-to-consumer markets are highly      competitive and we may be unable to compete successfully against existing      or future competitors.                                                                                                                                                                                       |
|          |                                                                                                                                                                                                                                                                                                                                                                                       |
| ●       | We      cannot assure the successful implementation of our business plan for      increased profitability and growth in our Retail Stores or      Direct-to-Consumer segments and we may be unable to successfully implement      our plan to improve merchandise assortments.  Recent changes in      management may fail to achieve improvement in our operating      results. |
|          |                                                                                                                                                                                                                                                                                                                                                                                       |

----

Table of Contents

| ● | A      continuing slowdown in the United States economy, an uncertain economic      outlook, and fluctuating energy costs could lead to reduced consumer      demand for our products in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | Our      inability to successfully manage labor costs, occupancy costs, or other      operating costs, or our inability to take advantage of opportunities to      reduce operating costs, could adversely affect our operating margins and      our results of operations.  We cannot assure the successful      implementation of our planned cost reduction and capital budget reduction      plans or the realization of our anticipated annualized expense savings      from our restructuring programs.  We may be unable to obtain      adequate insurance for our operations at a reasonable  cost.                                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | We      are subject to the Fair Labor Standards Act and various state and Federal      laws and regulations governing such matters as minimum wages, exempt      status classification, overtime, and employee benefits.  Changes      in Federal or state laws or regulations regarding minimum wages,      unionization, or other employee benefits could cause us to incur      additional wage and benefit costs, which could adversely affect our      results of operations.  Changes in legislation limiting interest      rates and other credit card charges that can be billed on credit card      accounts could negatively impact the operating margins of our credit      operation.                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | We      depend on the availability of credit for our working capital needs,      including credit we receive from our suppliers and their agents, and on      our credit card securitization facilities.  The current global      financial crisis could adversely affect our ability or the ability of our      vendors to secure adequate credit financing.  If we or our      vendors are unable to obtain sufficient financing at an affordable cost,      our ability to merchandise our retail stores or e-commerce businesses      could be adversely affected.                                                                                                                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | We      plan to refinance our maturing credit card term securitization series with      our credit conduit facilities, which are renewed annually, or through the      issuance of a new term series.  To the extent that our conduit      facilities are not renewed they would begin to amortize and we would      finance this amortization using our committed revolving credit facilities      to the extent available.  There is no assurance that we can      refinance or renew our conduit facilities on terms comparable to our      existing facilities or that there would be sufficient availability under      our revolving credit facilities for such financing.  Without      adequate liquidity, our ability to offer our credit program to our      customers and consequently our financial condition and results of      operations, would be adversely affected. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | Our      Retail Stores and Direct-to-Consumer segments experience seasonal      fluctuations in net sales and operating income.  Any decrease in      sales or margins during our peak sales periods or in the availability of      working capital during the months preceding such periods could have a      material adverse effect on our business.  In addition, extreme      or unseasonable weather conditions may have a negative impact on our      sales.                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | We      cannot assure the successful implementation of our business plan for the      development of our core brands and transformation to a vertical store      model, that we will realize increased profitability through operating      under a vertical store model, or that we will achieve our objectives as      quickly or as effectively as we hope.  We cannot assure the      successful sale of our FIGI’S catalog.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | We      depend on the efforts and abilities of our executive officers and their      management teams and we may not be able to retain or replace these      employees or recruit additional qualified personnel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ● | Our      business plan is largely dependent upon continued growth in the plus-size      women’s apparel market, which may not occur.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

Table of Contents

| ● | We      depend on our distribution and fulfillment centers and third-party freight      consolidators and service providers, and could incur significantly higher      costs and longer lead times associated with distributing our products to      our stores and shipping our products to our e-commerce and catalog      customers if operations at any of these locations were to be disrupted for      any reason.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Natural      disasters, as well as war, acts of terrorism, or other armed conflict, or      the threat of any such event may negatively impact availability of      merchandise and customer traffic to our stores, or otherwise adversely      affect our business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Successful      operation of our e-commerce websites and our catalog business is dependent      on our ability to maintain efficient and uninterrupted customer service      and fulfillment operations.  We cannot assure the successful      implementation of our new and upgraded e-commerce  platform.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | We      rely significantly on foreign sources of production and face a variety of      risks generally associated with doing business in foreign markets and      importing merchandise from abroad.  Such risks include (but are      not necessarily limited to) political instability; imposition of or      changes in duties or quotas; trade restrictions; increased security      requirements applicable to imports; delays in shipping; increased costs of      transportation; and issues relating to compliance with domestic or      international labor standards.                                                                                                                                                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Our      manufacturers may be unable to manufacture and deliver merchandise to us      in a timely manner or to meet our quality standards.  In      addition, if any one of our manufacturers or vendors fails to operate in      compliance with applicable laws and regulations, is perceived by the      public as failing to meet certain labor standards in the United States, or      employs unfair labor practices, our business could be adversely      affected.                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Our      long-term growth plan depends on our ability to open and profitably      operate new retail stores, to convert, where applicable, the formats of      existing stores on a profitable basis, and continue to expand our outlet      distribution channel.  Our retail stores depend upon a high      volume of traffic in the strip centers and malls in which our stores are      located, and our future retail store growth is dependent upon the      availability of suitable locations for new stores.  In addition,      we will need to identify, hire, and retain a sufficient number of      qualified personnel to work in our stores.  We cannot assure      that desirable store locations will continue to be available, or that we      will be able to hire and retain a sufficient number of suitable sales      associates at our stores. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | We      may be unable to protect our trademarks and other intellectual property      rights, which are important to our success and our competitive      position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Inadequate      systems capacity, a disruption or slowdown in telecommunications services,      changes in technology, changes in government regulations, systems issues,      security breaches, a failure to integrate order management systems, or      customer privacy issues could result in reduced sales or increases in      operating expenses as a result of our efforts or our inability to remedy      such issues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | We      continually evaluate our portfolio of businesses and may decide to acquire      or divest businesses or enter into joint venture or strategic      alliances.  If we fail to integrate and manage acquired      businesses successfully or fail to manage the risks associated with      divestitures, joint ventures, or other alliances, our business, financial      condition, and operating results could be materially and adversely      affected.                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

Table of Contents

| ● | Pursuant      to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to      include our assessment of the effectiveness of our internal control over      financial reporting in our annual reports.  Our independent      registered public accounting firm is also required to report on whether or      not they believe that we maintained, in all material respects, effective      internal control over financial reporting.  If we are unable to      maintain effective internal control over financial reporting we could be      subject to regulatory sanctions and a possible loss of public confidence      in the reliability of our financial reporting.  Such a failure      could result in our inability to provide timely and/or reliable financial      information and could adversely affect our business.                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | The      holders of our 1.125% Senior Convertible Notes due May 1, 2014 (the 1.125%      Notes) could require us to repurchase the principal amount of the notes      for cash before maturity of the notes upon the occurrence of a      “fundamental change” as defined in the prospectus filed in connection with      the 1.125% Notes.  Such a repurchase would require significant      amounts of cash, would be subject to important limitations on our ability      to repurchase, such as the risk of our inability to obtain funds for such      repurchase, and could adversely affect our financial      condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | Changes      to existing accounting rules or the adoption of new rules could have an      adverse impact on our reported results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ● | We      make certain significant assumptions, estimates, and projections related      to the useful lives and valuation of our property, plant, and equipment      and the valuation of goodwill and other intangible assets related to      acquisitions.  The carrying amount and/or useful life of these      assets are subject to periodic and/or annual valuation tests for      impairment.  Impairment results when the carrying value of an      asset exceeds the undiscounted (or for goodwill and indefinite-lived      intangible assets the discounted) future cash flows associated with the      asset.  If actual experience were to differ materially from the      assumptions, estimates, and projections used to determine useful lives or      the valuation of property, plant, equipment, or intangible assets, a      write-down for impairment of the carrying value of the assets, or      acceleration of depreciation or amortization of the assets, could      result.  Such a write-down or acceleration of depreciation or      amortization could have an adverse impact on our reported results of      operations. |

CRITICAL ACCOUNTING POLICIES

----

Table of Contents

RECENT DEVELOPMENTS

----

Table of Contents

OVERVIEW

----

Table of Contents

| ● | We      are working to improve our marketing.  We believe we can better      succeed by focusing on the basics of efficiently driving traffic both to      our stores and online, and by focusing on increasing the conversion rate      for customers in our stores and on our websites.                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | We      are focused on assortments planning and selling outfits.  We      believe we can better succeed by improving our buying and in-store      merchandising of appropriate assortments of bottoms, tops, accessories,      intimates, and related products.                                                                                                                                                                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | We      are working to complete the process of transforming into a vertical      specialty store model, increasing the percentage of internally designed      and developed fashion product and transforming each of our core brands      into more independent, distinct brands.                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | We      are focused on increasing our internet business across all of our      brands.  We are partnering with a third party technology      provider to outsource the development and hosting of our new e-commerce      platform.  We anticipate that all of our core brands will      convert from the existing platform infrastructure to the new platform by      the beginning of the Fiscal 2010 Third Quarter, with the objective of      providing an improved on-line customer experience and increased sales      conversion rates, resulting in an increase in our e-commerce      penetration. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | We      are divesting certain non-core assets, including the shutdown of our LANE      BRYANT WOMAN catalog and SHOETRADER.COM website, which we expect to      complete by the end of the Fiscal 2010 second quarter.  In      addition, we continue to explore the sale of our FIGI’S Gifts in Good      Taste catalog business.                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | We      have significantly reduced our capital expenditures and have eliminated      non-essential capital expenditures.  Our capital expenditures      for the Fiscal 2010 First Quarter were $4.7 million as compared to $22.0      million for the Fiscal 2009 First Quarter.  We expect our      capital expenditures for Fiscal 2010 to be approximately half of our      Fiscal 2009 expenditures.                                                                                                                                                                                                    |

----

Table of Contents

RESULTS OF OPERATIONS

|                                                             |   |                    |    |   | Percentage  |   |
|------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------|--------|
|                                                             |   | Thirteen Weeks Ended(1) |    |   | Change      |   |
|                                                             |   | May      2,             |    |   | May      3, |   |   | From      Prior |   |
|                                                             |   | 2009                    |    |   | 2008        |   |   | Period |   |
|                                                             |   |                    |    |   |        |   |   |   |   |
| Net      sales                                                   |   |                    | 100.0   | %      |        |   | 100.0 | % |   |   | (16.1 | )% |
| Cost      of goods sold, buying, catalog, and occupancy expenses |   |                    | 69.2    |   |        |   | 69.7 |   |   |   | (16.7 | ) |
| Selling,      general, and administrative expenses               |   |                    | 29.4    |   |        |   | 29.1 |   |   |   | (15.4 | ) |
| Restructuring      and other charges                             |   |                    | 1.6     |   |        |   | 0.6 |   |   |   | 141.1 |   |
| Income/(loss)      from operations                               |   |                    | (0.2    | )      |        |   | 0.6 |   |   |   | (133.8 | ) |
| Other      income                                                |   |                    | 0.0     |   |        |   | 0.1 |   |   |   | (61.6 | ) |
| Gain      on repurchase of 1.125% Senior Convertible Notes       |   |                    | 0.8     |   |        |   | – |   |   |   | – |   |
| Interest      expense                                            |   |                    | 0.9     |   |        |   | 0.8 |   |   |   | 1.2 |   |
| Income      tax provision                                        |   |                    | 0.9     |   |        |   | 0.0 |   |   |   | ** |   |
| Loss      from continuing operations                             |   |                    | (1.2    | )      |        |   | (0.1 | ) |   |   | 591.4 |   |
| Loss      from discontinued operations, net of tax               |   |                    | – |   |        |   | (7.2 | ) |   |   | – |   |
| Net      loss                                                    |   |                    | (1.2    | )      |        |   | (7.3 | ) |   |   | (86.0 | ) |
| ____________________                                             |   |
| (1)        Results may not add due to rounding.        |   |
| **        Not meaningful.                              |   |

----

Table of Contents

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Thirteen Weeks Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | May      2,          |   |   | May      3, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2009                 |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |
| Retail      Stores segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |   |   |
| Increase      (decrease) in comparable store sales(1)      :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   |   |   |   |
| Consolidated      retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                 | (13    | )% |   |   | (13 | )% |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 | (15    | ) |   |   | (12 | ) |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (13    | ) |   |   | (12 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 | (9     | ) |   |   | (16 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |   |   |
| Sales      from new stores as a percentage of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 |   |   |   |   |   |   |
| Consolidated prior-period      sales(2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                 |   |   |   |   |   |   |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 | 2      |   |   |   | 4 |   |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | 0      |   |   |   | 1 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 | 0      |   |   |   | 1 |   |
| Other      retail stores(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 | 0      |   |   |   | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |   |   |
| Prior-period      sales from closed stores as a percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |   |   |   |   |
| of total consolidated      prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                 |   |   |   |   |   |   |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 | (2     | ) |   |   | (3 | ) |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (3     | ) |   |   | (1 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 | 0      |   |   |   | (0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |   |   |
| Decrease      in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | (16    | ) |   |   | (11 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |   |   |
| Direct-to-Consumer      segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                 |   |   |   |   |   |   |
| (Decrease)/Increase      in Direct-to-Consumer segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | (28    | ) |   |   | 162 | (5) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |   |   |   |   |
| Decrease      in consolidated total net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 | (16    | ) |   |   | (8 | ) |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| (1)        “Comparable store sales” is not a measure that has been defined under      generally accepted accounting principles. The method of calculating      comparable store sales varies across the retail industry and, therefore,      our calculation of comparable store sales is not necessarily comparable to      similarly-titled measures reported by other companies. We define      comparable store sales as sales from stores operating in both the current      and prior-year periods. New stores are added to the comparable store      sales base 13 months after their open date. Sales from stores that      are relocated within the same mall or strip-center, remodeled, or have a      legal square footage change of less than 20% are included in the      calculation of comparable store sales. Sales from stores that are      relocated outside the existing mall or strip-center, or have a legal      square footage change of 20% or more, are excluded from the calculation of      comparable store sales until 13 months after the relocated store is      opened. Stores that are temporarily closed for a period of 4 weeks or      more are excluded from the calculation of comparable store sales for the      applicable periods in the year of closure and the subsequent      year. Non-store sales, such as catalog and internet sales, are      excluded from the calculation of comparable store sales. |   |
| (2)        Includes incremental Retail Stores segment e-commerce sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (3)        Includes LANE BRYANT OUTLET stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (4)        Includes PETITE SOPHISTICATE stores, which were closed in August 2008, and      PETITE SOPHISTICATE OUTLET stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
| (5)        Primarily due to LANE BRYANT WOMAN catalog which began operations in the      Fiscal 2008 Fourth Quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |

----

Table of Contents

|                                                                                                                                                                                                                  |   |   |   |   | Depreciation |   |      | Income               |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------------|--------|-----------|----------------------|--------|
|                                                                                                                                                                                                                  |   | Net    |   |   | and          |   |      | Before      Interest |   |
| (In      millions)                                                                                                                                                                                                    |   | Sales  |   |   | Amortization |   |      | and      Taxes       |   |
|                                                                                                                                                                                                                  |   |   |   |   |         |   |      |                 |   |
| Thirteen      weeks ended May 2, 2009                                                                                                                                                                                 |   |   |   |   |         |   |      |                 |   |
| LANE      BRYANT(1)                                                                                                                                                                                                   |   | $      | 253.8  |   |         | $      | 8.0       |                 |   | $ | 30.8 |   |
| FASHION      BUG                                                                                                                                                                                                      |   |   | 178.7  |   |         |   | 3.0       |                 |   |   | (0.2 | ) |
| CATHERINES                                                                                                                                                                                                            |   |   | 78.7   |   |         |   | 1.7       |                 |   |   | 7.7 |   |
| Other      retail stores(2)                                                                                                                                                                                           |   |   | 4.4    |   |         |   |  0.0 |                 |   |   | 0.2 |   |
| Total      Retail Stores segment                                                                                                                                                                                      |   |   | 515.6  |   |         |   | 12.7      |                 |   |   | 38.5 |   |
| Total      Direct-to-Consumer segment                                                                                                                                                                                 |   |   | 19.5   |   |         |   | 0.0       |                 |   |   | (3.4 | ) |
| Corporate      and other                                                                                                                                                                                              |   |   | 3.0    | (3)    |         |   |  7.8 |                 |   |   | (31.9 | )(4) |
| Total      consolidated                                                                                                                                                                                               |   | $      | 538.1  |   |         | $      | 20.5      |                 |   | $ |  3.2 |   |
|                                                                                                                                                                                                                  |   |   |   |   |         |   |      |                 |   |   |   |   |
| Thirteen      weeks ended May 3, 2008                                                                                                                                                                                 |   |   |   |   |         |   |      |                 |   |   |   |   |
| LANE      BRYANT(1)                                                                                                                                                                                                   |   | $      | 297.0  |   |         | $      | 8.1       |                 |   | $ | 29.7 |   |
| FASHION      BUG                                                                                                                                                                                                      |   |   | 221.8  |   |         |   | 5.2       |                 |   |   | 7.1 |   |
| CATHERINES                                                                                                                                                                                                            |   |   | 86.5   |   |         |   | 0.4       |                 |   |   | 7.2 |   |
| Other      retail stores(2)                                                                                                                                                                                           |   |   | 6.0    |   |         |   | 0.1       |                 |   |   | (0.6 | ) |
| Total      Retail Stores segment                                                                                                                                                                                      |   |   | 611.3  |   |         |   | 13.8      |                 |   |   | 43.4 |   |
| Total      Direct-to-Consumer segment                                                                                                                                                                                 |   |   | 26.9   |   |         |   | 0.0       |                 |   |   | (4.2 | ) |
| Corporate      and other                                                                                                                                                                                              |   |   | 3.1    | (3)    |         |   | 12.5      |                 |   |   | (34.9 | )(4) |
| Total      consolidated                                                                                                                                                                                               |   | $      | 641.3  |   |         | $      | 26.3      |                 |   | $ |  4.3 |   |
| ____________________                                                                                                                                                                                                  |   |
| (1)       Includes LANE BRYANT OUTLET stores.                                                                                                                                                                    |   |
| (2)       Includes PETITE SOPHISTICATE stores, which began operations in October      2007 and were closed in August 2008, and PETITE SOPHISTICATE OUTLET      stores, which began operations in September 2006. |   |
| (3)       Primarily revenue related to loyalty card fees.                                                                                                                                                        |   |
| (4)       Includes restructuring and other charges of $8.7 million in 2009 and $3.6      million in 2008.                                                                                                        |   |

----

Table of Contents

|                                |   |   |   |   |    |   |   |       |   |   | PETITE        |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|---------|--------|--------|------------|--------|--------|---------------|--------|--------|--------|--------|
|                                |   | LANE   |   |   | FASHION |   |   |       |   |   | SOPHISTICATE  |   |   |   |   |
|                                |   | BRYANT |   |   | BUG     |   |   | CATHERINES |   |   | OUTLET        |   |   | Total  |   |
|                                |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |
| Fiscal      2010 Year-to-Date:      |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |
| Stores      at January 31, 2009     |   |   | 892    |   |    |   | 897    |       |   |   | 463           |   |   |   | 49     |   |   |   | 2,301 |   |
|                                |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |   |   |   |   |   |
| Stores      opened                  |   |   | 3      |   |    |   | 0      |       |   |   | 3             |   |   |   | 0      |   |   |   | 6 |   |
| Stores      closed(1)               |   |   | (11    | )      |    |   | (18    | )          |   |   |  (1      | )      |   |   | (5     | ) |   |   | (35 | ) |
| Net      change in stores           |   |   | ( 8    | )      |    |   | (18    | )          |   |   |   2 |   |   |   | (5     | ) |   |   | (29 | ) |
|                                |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |   |   |   |   |   |
| Stores      at May 2, 2009          |   |   | 884    |   |    |   | 879    |       |   |   | 465           |   |   |   | 44     |   |   |   | 2,272 |   |
|                                |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |   |   |   |   |   |
| Stores      relocated during period |   |   | 5      |   |    |   | 0      |       |   |   | 0             |   |   |   | 0      |   |   |   | 5 |   |
|                                |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |   |   |   |   |   |
| Fiscal      2010:                   |   |   |   |   |    |   |   |       |   |   |          |   |   |   |   |   |   |   |   |   |
| Planned      store openings         |   |   | 6      |   |    |   | 0      |       |   |   | 5             |   |   |   | 0      |   |   |   | 11 |   |
| Planned      store closings         |   |   | 30     | (2)    |    |   | 45     |       |   |   | 13            |   |   |   | 17     |   |   |   | 105 |   |
| Planned      store relocations      |   |   | 9      |   |    |   | 3      |       |   |   | 0             |   |   |   | 0      |   |   |   | 12 |   |

| ____________________                                                                                                                                                                         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)        Includes 6 FASHION BUG and 4 LANE BRYANT stores closed as part of the      store closing  initiatives announced in February 2008 and      November 2008. |
| (2)        Includes 1 LANE BRYANT OUTLETstore.                                                                                                                                     |

----

Table of Contents

----

Table of Contents

| ● | $4.1      million for costs related to our multi-year business transformation      initiatives.                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                 |
| ● | $1.2      million for retention and non-cash accelerated depreciation for the      planned shutdown of the LANE BRYANT WOMAN catalog operations, which we      expect to complete by the end of the Fiscal 2010 Second      Quarter. |
|    |                                                                                                                                                                                                                                 |
| ● | $2.9      million for accelerated depreciation related to fixed assets retained from      the sale of the non-core misses apparel catalog business, which will be      fully depreciated by the Fiscal 2010 Third Quarter.           |
|    |                                                                                                                                                                                                                                 |
| ● | $0.5      million for lease termination costs related to the closing of      under-performing stores.                                                                                                                                |
|    |                                                                                                                                                                                                                                 |

----

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

|                                |   | May      2, |   |   | January      31, |   |
|-------------------------------------|--------|-------------|--------|--------|------------------|--------|
| (Dollars      in millions)          |   | 2009        |   |   | 2009             |   |
|                                |   |        |   |   |             |   |
| Cash      and cash equivalents      |   | $           | 123.9  |   |             | $      | 93.8 |   |
| Available-for-sale      securities  |   | $           | 0.4    |   |             | $      | 6.4 |   |
| Working      capital                |   | $           | 388.9  |   |             | $      | 382.0 |   |
| Current      ratio                  |   |        | 2.3    |   |             |   | 2.4 |   |
| Long-term      debt to equity ratio |   |        | 42.1   | %      |             |   | 43.3 | % |

----

Table of Contents

----

Table of Contents

FINANCING

| (Dollars in millions)                                                                                                                                                                                                                                                                                                                                                             | Series      1999-2  |   | Series      2004-VFC         |   | Series      2004-1  |   | Series      2007-1  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|--------|------------------------------|--------|---------------------|--------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                              |                |   |                         |   |                |   |                |   |
| Date      of facility                                                                                                                                                                                                                                                                                                                                                             | May      1999       |   | January      2004            |   | August      2004    |   | October      2007   |   |
| Type      of facility                                                                                                                                                                                                                                                                                                                                                             | Conduit             |   | Conduit                      |   | Term                |   | Term                |   |
| Maximum      funding                                                                                                                                                                                                                                                                                                                                                              | $50.0               |   | $105.0                       |   | $180.0              |   | $320.0              |   |
| Funding      as of May 2, 2009                                                                                                                                                                                                                                                                                                                                                    | $11.0               |   | $    3.5 |   | $165.6              |   | $320.0              |   |
| First      scheduled principal payment                                                                                                                                                                                                                                                                                                                                            | Not      applicable |   | Not      applicable          |   | April      2009     |   | April      2012     |   |
| Expected      final principal payment                                                                                                                                                                                                                                                                                                                                             | Not applicable(1)   |   | Not applicable(1)            |   | March      2010     |   | March      2013     |   |
| Next      renewal date                                                                                                                                                                                                                                                                                                                                                            | March      2010     |   | January      2010            |   | Not      applicable |   | Not      applicable |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                         |
| (1)        Series 1999-2 and Series 2004-VFC have scheduled final payment dates that      occur in the twelfth month following the month in which the series begins      amortizing.  These series begin amortizing on the next renewal      date subject to the further extension of the renewal date as a result of      renewal of the purchasecommitment. |

----

Table of Contents

----

Table of Contents

|                                                                                                               |   | Thirteen Weeks Ended |       |
|--------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|
|                                                                                                               |   | May      2,          |       |   | May      3, |   |
| (In      millions)                                                                                                 |   | 2009                 |       |   | 2008 |   |
|                                                                                                               |   |                 |       |   |   |   |
| Net      securitization excess spread revenues                                                                     |   | $                    | 16.9       |   |   | $ | 23.3 |   |
| Net      additions to the I/O strip and servicing liability                                                        |   |                 | (1.2       | ) |   |   | 0.3 |   |
| Other      credit card revenues, net(1)                                                                            |   |                 |  3.2  |   |   |   |  3.3 |   |
| Total      credit card revenues                                                                                    |   |                 | 18.9       |   |   |   | 26.9 |   |
| Less      total credit card program expenses                                                                       |   |                 |  14.9 |   |   |   | 17.9 |   |
| Total      credit contribution                                                                                     |   | $                    | 4.0        |   |   | $ | 9.0 |   |
| ____________________                                                                                               |   |
| (1)       Excludes inter-company merchant fees between our credit entities and      our retail entities. |   |

----

Table of Contents

|                                         |   | Thirteen Weeks Ended |   |
|----------------------------------------------|--------|----------------------|--------|
|                                         |   | May      2,          |   |   | May      3, |   |
| (In      millions)                           |   | 2009                 |   |   | 2008 |   |
|                                         |   |                 |   |   |   |   |
| Average      managed receivables outstanding |   | $                    | 504.4  |   |   | $ | 585.4 |   |
| Ending      managed receivables outstanding  |   | $                    | 499.2  |   |   | $ | 596.1 |   |

----

Table of Contents

MARKET RISK

----

Table of Contents

IMPACT OF RECENT ACCOUNTINGPRONOUNCEMENTS

Item 3. Quantitative and Qualitative Disclosures AboutMarket Risk

Item 4. Controls and Procedures

----

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

----

Table of Contents

----

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use ofProceeds

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Total                 |   |   | Maximum          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Number                |   |   | Number      of   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | of      Shares        |   |   | Shares      that |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Purchased      as     |   |   | May      Yet be  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Total          |   |   |            |   |   | Part      of Publicly |   |   | Purchased        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Number         |   |   | Average         |   |   | Announced             |   |   | Under      the   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | of      Shares |   |   | Price      Paid |   |   | Plans      or         |   |   | Plans      or    |   |
| Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Purchased      |   |   | per Share       |   |   | Programs(2)           |   |   | Programs(2)      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   |                  |   |   |             |   |
| February      1, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |           |   |   |            |   |   |                  |   |   |             |   |
| February      28, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           | 26,905 | (1)    |            | $      | 1.12   |                  |   |   | –          |   |   |   |   |
| March      1, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |           |   |   |            |   |   |                  |   |   |             |   |   |   |   |
| April      4, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |           | 61,938 | (1)    |            |   | 1.33   |                  |   |   | –          |   |   |   |   |
| April      5, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |           |   |   |            |   |   |                  |   |   |             |   |   |   |   |
| May      2, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |           | 0      |   |            |   | 0.00   |                  |   |   | –          |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           | 88,843 |   |            | $      | 1.27   |                  |   |   | –          |   |   |   | (2) |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (1)        Shares withheld for the payment of payroll taxes on employee stock      awards that vested during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| (2)        On November 8, 2007 we publicly announced that our Board of Directors      granted authority to repurchase shares of our common stock up to an      aggregate value of $200 million. Shares may be purchased in the open      market or through privately-negotiated transactions, as market conditions      allow. During the period from February 3, 2008 through May 3, 2008 we      repurchased a total of 505,406 shares of stock ($5.21 average price paid      per share) in the open market under this program. No shares have been      purchased under this plan subsequent to May 3, 2008. As of May 2,      2009, $197,364,592 was available for future repurchases under this      program. This repurchase program has no expiration date. |   |

Item 6. Exhibits

| 2.1    | Stock      Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition      Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown      Traders, Inc. whose names are set forth on the signature pages thereto,      and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,      incorporated by reference to Form 8-K of the Registrant dated June 2,      2005, filed on June 8, 2005 (File No. 000-07258, Exhibit      2.1). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.2    | Stock      Purchase Agreement dated as of August 25, 2008 by and between Crosstown      Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and      the other persons listed on the signature page thereto, incorporated by      reference to Form 8-K of the Registrant dated August 25, 2008, filed on      August 28, 2008 (File No. 000-07258, Exhibit 10.1).                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.3    | Amendment      No. 1 to Stock Purchase Agreement dated as of September 18, 2008 by and      among Crosstown Traders, Inc. and Norm Thompson Outfitters, Inc.,      incorporated by reference to Form 8-K of the Registrant dated September      18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit      10.2).                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

Table of Contents

| 2.4    | Transition      Services Agreement dated as of September 18, 2008 by and between Charming      Shoppes of Delaware, Inc. and Arizona Mail Order Company, incorporated by      reference to Form 8-K of the Registrant dated September 18, 2008, filed on      September 19, 2008 (File No. 000-07258, Exhibit 10.3).                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.1    | Restated      Articles of Incorporation, incorporated by reference to Form 10-Q of the      Registrant for the quarter ended August 2, 2008 (File No. 000-07258,      Exhibit 3.1).                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.2    | Bylaws,      as Amended and Restated, incorporated by reference to Form 10-K of the      Registrant for the fiscal year ended January 31, 2009 (File No. 000-07258,      Exhibit 3.2).                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1   | Offer      Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and      James P. Fogarty, incorporated by reference to Form 8-K of the Registrant      dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.1).                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2   | Severance      Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc.      and James P. Fogarty, incorporated by reference to Form 8-K of the      Registrant dated April 2, 2009, filed on April 7, 2009 (File No.      000-07258, Exhibit 10.2).                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.3   | Stock      Appreciation Rights Agreement dated as of April 2, 2009 by and between      Charming Shoppes, Inc. and James B. Fogarty (Inducement Grant),      incorporated by reference to Form 8-K of the Registrant dated April 2,      2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.3).                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.4   | Stock      Appreciation Rights Agreement dated as of April 2, 2009 by and between      Charming Shoppes, Inc. and James B. Fogarty (Time-Based Grant),      incorporated by reference to Form 8-K of the Registrant dated April 2,      2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.4).                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.5   | Form      of Amendment to the Severance Agreements between certain executive vice      presidents and the Company, including the following named executive      officers: Eric M. Specter, Joseph M. Baron, James G. Bloise and Colin D.      Stern, incorporated by reference to Form 8-K of the Registrant dated May      1, 2009, filed on May 5, 2009 (File No. 000-07258, Exhibit      10.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1   | Certification by Principal Executive Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of    2002.                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.2   | Certification by Principal Financial Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of    2002.                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                               |
| 32     | Certification Pursuant to 18 U.S.C. Section 1350,      as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.                                                                                                                                                                                                                                                                  |

----

Table of Contents

SIGNATURES

|                     | CHARMING SHOPPES, INC.         |
|--------------------------|--------------------------------|
|                     | (Registrant)                   |
|                     |                           |
|                     |                           |
|                     |                           |
| Date:      June 10, 2009 | /S/      JAMES P.      FOGARTY |
|                     | James      P. Fogarty          |
|                     | President                      |
|                     | Chief      Executive Officer   |
|                     |                           |
|                     |                           |
|                     |                           |
| Date:      June 10, 2009 | /S/ ERIC M. SPECTER            |
|                     | Eric      M. Specter           |
|                     | Executive      Vice President  |
|                     | Chief      Financial Officer   |

----

Table of Contents

EXHIBIT INDEX

| Exhibit No. | Item                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.1         | Stock      Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition      Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown      Traders, Inc. whose names are set forth on the signature pages thereto,      and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,      incorporated by reference to Form 8-K of the Registrant dated June 2,      2005, filed on June 8, 2005 (File No. 000-07258, Exhibit      2.1). |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.2         | Stock      Purchase Agreement dated as of August 25, 2008 by and between Crosstown      Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and      the other persons listed on the signature page thereto, incorporated by      reference to Form 8-K of the Registrant dated August 25, 2008, filed on      August 28, 2008 (File No. 000-07258, Exhibit 10.1).                                                                                                 |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.3         | Amendment      No. 1 to Stock Purchase Agreement dated as of September 18, 2008 by and      among Crosstown Traders, Inc. and Norm Thompson Outfitters, Inc.,      incorporated by reference to Form 8-K of the Registrant dated September      18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit      10.2).                                                                                                                                                       |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 2.4         | Transition      Services Agreement dated as of September 18, 2008 by and between Charming      Shoppes of Delaware, Inc. and Arizona Mail Order Company, incorporated by      reference to Form 8-K of the Registrant dated September 18, 2008, filed on      September 19, 2008 (File No. 000-07258, Exhibit 10.3).                                                                                                                                                                 |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 3.1         | Restated      Articles of Incorporation, incorporated by reference to Form 10-Q of the      Registrant for the quarter ended August 2, 2008 (File No. 000-07258,      Exhibit 3.1).                                                                                                                                                                                                                                                                                             |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 3.2         | Bylaws,      as Amended and Restated, incorporated by reference to Form 10-K of the      Registrant for the fiscal year ended January 31, 2009 (File No. 000-07258,      Exhibit 3.2).                                                                                                                                                                                                                                                                                               |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1        | Offer      Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and      James P. Fogarty, incorporated by reference to Form 8-K of the Registrant      dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.1).                                                                                                                                                                                                                       |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2        | Severance      Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc.      and James P. Fogarty, incorporated by reference to Form 8-K of the      Registrant dated April 2, 2009, filed on April 7, 2009 (File No.      000-07258, Exhibit 10.2).                                                                                                                                                                                                                |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.3        | Stock      Appreciation Rights Agreement dated as of April 2, 2009 by and between      Charming Shoppes, Inc. and James B. Fogarty (Inducement Grant),      incorporated by reference to Form 8-K of the Registrant dated April 2,      2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.3).                                                                                                                                                                        |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.4        | Stock      Appreciation Rights Agreement dated as of April 2, 2009 by and between      Charming Shoppes, Inc. and James B. Fogarty (Time-Based Grant),      incorporated by reference to Form 8-K of the Registrant dated April 2,      2009, filed on April 7, 2009 (File No. 000-07258, Exhibit      10.4).                                                                                                                                                                        |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.5        | Form      of Amendment to the Severance Agreements between certain executive vice      presidents and the Company, including the following named executive      officers: Eric M. Specter, Joseph M. Baron, James G. Bloise and Colin D.      Stern, incorporated by reference to Form 8-K of the Registrant dated May      1, 2009, filed on May 5, 2009 (File No. 000-07258, Exhibit      10.1).                                                                                   |

----

Table of Contents

| 31.1   | Certification by Principal Executive Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of    2002.                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                              |
| 31.2   | Certification by Principal Financial Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of    2002.                   |
|   |                                                                                                                              |
| 32     | Certification Pursuant to 18 U.S.C. Section 1350,      as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of      2002. |

----