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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON**
**,      D.C. 20549**

**FORM      10-Q**

**x**
**      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**or**

**o**
**      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**Commission      File No. 000-07258**

**CHARMING      SHOPPES, INC.**

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

|   | **450                WINKS LANE, BENSALEM, PA 19020**              |   | **(215)                245-9100**                                         |   |
|--------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|   | (Address                of principal executive offices) (Zip Code) |   | (Registrant’s                telephone number, including Area Code) |   |

**NOT      APPLICABLE**

| Large                Accelerated Filer x | Accelerated                Filer o | Non-accelerated                Filer o |
|------------------------------------------|------------------------------------|----------------------------------------|

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Table          of Contents

**CHARMING****SHOPPES, INC. AND SUBSIDIARIES**

**TABLE      OF CONTENTS**

|                        |                                                                                                                          | **Page** |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------|----------|
| **PART                I.**  | **FINANCIAL                INFORMATION**                                                                                      |     |
|                        |                                                                                                                          |     |
| **Item                1.**  | **Financial                Statements (Unaudited)**                                                                           | 2        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Balance Sheets                                                                          |     |
|                        | April                29, 2006 and January 28, 2006                                                                            | 2        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Statements of Operations and Comprehensive                Income                        |     |
|                        | Thirteen                weeks ended April 29, 2006 and April 30, 2005                                                         | 3        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Statements of Cash Flows                                                                |     |
|                        | Thirteen                weeks ended April 29, 2006 and April 30, 2005                                                         | 4        |
|                        |                                                                                                                          |     |
|                        | Notes                to Condensed Consolidated Financial Statements                                                           | 5        |
|                        |                                                                                                                          |     |
| **Item                2.**  | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations** | 15       |
|                        |                                                                                                                          |     |
|                        | Forward-looking                Statements                                                                                     | 15       |
|                        |                                                                                                                          |     |
|                        | Critical                Accounting Policies                                                                                   | 17       |
|                        |                                                                                                                          |     |
|                        | Recent                Developments                                                                                            | 19       |
|                        |                                                                                                                          |     |
|                        | Results                of Operations                                                                                          | 19       |
|                        |                                                                                                                          |     |
|                        | Liquidity                and Capital Resources                                                                                | 23       |
|                        |                                                                                                                          |     |
|                        | Financing                                                                                                                     | 26       |
|                        |                                                                                                                          |     |
|                        | Market                Risk                                                                                                    | 27       |
|                        |                                                                                                                          |     |
|                        | Impact                of Recent Accounting Pronouncements                                                                     | 28       |
|                        |                                                                                                                          |     |
| **Item                3.**  | **Quantitative                and Qualitative Disclosures About Market Risk**                                                 | 28       |
|                        |                                                                                                                          |     |
| **Item                4.**  | **Controls                and Procedures**                                                                                    | 28       |
|                        |                                                                                                                          |     |
| **PART                II.** | **OTHER                INFORMATION**                                                                                          |     |
|                        |                                                                                                                          |     |
| **Item                1.**  | **Legal                Proceedings**                                                                                          | 29       |
|                        |                                                                                                                          |     |
| **Item                1A.** | **Risk                Factors**                                                                                               | 29       |
|                        |                                                                                                                          |     |
| **Item                2.**  | **Unregistered                Sales of Equity Securities and Use of Proceeds**                                                | 30       |
|                        |                                                                                                                          |     |
| **Item                6.**  | **Exhibits**                                                                                                                  | 30       |
|                        |                                                                                                                          |     |
|                        | **SIGNATURES**                                                                                                                | 32       |
|                        |                                                                                                                          |     |
|                        | **Exhibit                Index**                                                                                              | 33       |

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Table          of Contents

**PART      I.****FINANCIAL INFORMATION**

**Item      1.****Financial Statements**

**CHARMING****SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                         |   | **April                29,** |          | **January                28,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------------|--------------------------------|--------|
| ***(In                thousands, except share amounts)***                                                                    |   | **2006**                     |          | **2006**                       |   |
|                                                                                                                         |   | **(Unaudited)**              |          |                           |   |
| **ASSETS**                                                                                                                   |   |                         |          |                           |   |   |   |
| **Current                assets**                                                                                            |   |                         |          |                           |   |   |   |
| Cash                and cash equivalents                                                                                |   | **$**                        | **154,877**   |                           | $      | 130,132 |   |
| Available-for-sale                securities                                                                            |   |                         | **11,807**    |                           |   | 20,150 |   |
| Accounts                receivable, net of allowances of $6,903 and $6,588                                              |   |                         | **8,485**     |                           |   | 38,603 |   |
| Investment                in asset-backed securities                                                                    |   |                         | **69,116**    |                           |   | 66,828 |   |
| Merchandise                inventories                                                                                  |   |                         | **448,615**   |                           |   | 376,409 |   |
| Deferred                advertising                                                                                     |   |                         | **21,544**    |                           |   | 20,591 |   |
| Deferred                taxes                                                                                           |   |                         | **13,738**    |                           |   | 13,848 |   |
| Prepayments                and other                                                                                    |   |                         | **100,372**   |                           |   | 89,245 |   |
| **Total                current assets**                                                                                 |   |                         | **828,554**   |                           |   | 755,806 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| Property,                equipment, and leasehold improvements - at cost                                                |   |                         | **902,878**   |                           |   | 888,481 |   |
| Less                accumulated depreciation and amortization                                                           |   |                         | **535,848**   |                           |   | 525,882 |   |
| **Net                property, equipment, and leasehold improvements**                                                  |   |                         | **367,030**   |                           |   | 362,599 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| Trademarks                and other intangible assets                                                                   |   |                         | **250,590**   |                           |   | 250,074 |   |
| Goodwill                                                                                                                |   |                         | **154,014**   |                           |   | 154,553 |   |
| Other                assets                                                                                             |   |                         | **49,401**    |                           |   | 43,963 |   |
| **Total                assets**                                                                                         |   | **$**                        | **1,649,589** |                           | $      | 1,566,995 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                |   |                         |          |                           |   |   |   |
| **Current                liabilities**                                                                                       |   |                         |          |                           |   |   |   |
| Short-term                borrowings                                                                                    |   | **$**                        | **40,000**    |                           | $      | 50,000 |   |
| Accounts                payable                                                                                         |   |                         | **182,956**   |                           |   | 133,236 |   |
| Accrued                expenses                                                                                         |   |                         | **203,363**   |                           |   | 217,421 |   |
| Income                taxes payable                                                                                     |   |                         | **17,982**    |                           |   | 1,743 |   |
| Current                portion - long-term debt                                                                         |   |                         | **13,720**    |                           |   | 14,765 |   |
| **Total                current liabilities**                                                                            |   |                         | **458,021**   |                           |   | 417,165 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| Deferred                taxes                                                                                           |   |                         | **43,383**    |                           |   | 45,046 |   |
| Other                non-current liabilities                                                                            |   |                         | **105,706**   |                           |   | 98,457 |   |
| Long-term                debt                                                                                           |   |                         | **189,258**   |                           |   | 191,979 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| **Stockholders’                equity**                                                                                |   |                         |          |                           |   |   |   |
| Common                Stock $.10 par value:                                                                                  |   |                         |          |                           |   |   |   |
| Authorized                - 300,000,000 shares                                                                               |   |                         |          |                           |   |   |   |
| Issued                - 134,554,302 shares and 133,954,852 shares                                                       |   |                         | **13,455**    |                           |   | 13,395 |   |
| Additional                paid-in capital                                                                               |   |                         | **267,826**   |                           |   | 261,077 |   |
| Treasury                stock at cost - 12,265,993 shares                                                               |   |                         | **(84,136**   | **)**                          |   | (84,136 | ) |
| Accumulated                other comprehensive loss                                                                     |   |                         | **0**         |                           |   | (3 | ) |
| Retained                earnings                                                                                        |   |                         | **656,076**   |                           |   | 624,015 |   |
| **Total                stockholders’ equity**                                                                     |   |                         | **853,221**   |                           |   | 814,348 |   |
| **Total                liabilities and stockholders’ equity**                                                     |   | **$**                        | **1,649,589** |                           | $      | 1,566,995 |   |
|                                                                                                                         |   |                         |          |                           |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
|                                                                                                                         |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                 |

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Table          of Contents

**CHARMING****SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**AND      COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                                      |   | **Thirteen                Weeks Ended** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|
|                                                                                                                                      |   | **April                29,**            |        | **April                30,** |   |
| ***(In                thousands, except per share amounts)***                                                                             |   | **2006**                                |        | **2005** |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Net                sales**                                                                                                              |   | **$**                                   | **734,922** |   | $ | 603,353 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                                                |   |                                    | **499,288** |   |   | 403,922 |   |
| Selling,                general, and administrative expenses                                                                              |   |                                    | **183,232** |   |   | 150,938 |   |
| **Total                operating expenses**                                                                                               |   |                                    | **682,520** |   |   | 554,860 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Income                from operations**                                                                                                 |   |                                    | **52,402**  |   |   | 48,493 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| Other                income                                                                                                               |   |                                    | **1,548**   |   |   | 2,815 |   |
| Interest                expense                                                                                                           |   |                                    | **(4,124**  | **)** |   | (3,925 | ) |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| Income                before income taxes                                                                                                 |   |                                    | **49,826**  |   |   | 47,383 |   |
| Income                tax provision                                                                                                       |   |                                    | **17,765**  |   |   | 17,366 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Net                income**                                                                                                             |   |                                    | **32,061**  |   |   | 30,017 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Other                comprehensive income, net of tax**                                                                                 |   |                                    |        |   |   |   |   |
| Unrealized                gains on available-for-sale securities, net of income tax provision                of $2                in 2006 |   |                                    | **3**       |   |   | 0 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Comprehensive                income**                                                                                                   |   | **$**                                   | **32,064**  |   | $ | 30,017 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Basic                net income per share**                                                                                             |   | **$**                                   | **.26**     |   | $ | .25 |   |
|                                                                                                                                      |   |                                    |        |   |   |   |   |
| **Diluted                net income per share**                                                                                           |   | **$**                                   | **.24**     |   | $ | .23 |   |
|                                                                                                                                      |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation.              |
|                                                                                                                                      |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                              |

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Table          of Contents

**CHARMING****SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                         |   | **Thirteen                Weeks Ended** |         |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------------|
|                                                                                                                         |   | **April                29,**            |         | **April                30,** |   |
| ***(In                thousands)***                                                                                          |   | **2006**                                |         | **2005** |   |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| **Operating                activities**                                                                                      |   |                                    |         |   |   |   |   |
| Net                income                                                                                               |   | **$**                                   | **32,061**   |   | $ | 30,017 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities               |   |                                    |         |   |   |   |   |
| Depreciation                and amortization                                                                            |   |                                    | **20,158**   |   |   | 18,728 |   |
| Deferred                income taxes                                                                                    |   |                                    | **(1,665**   | **)** |   | 151 |   |
| Stock-based                compensation                                                                                 |   |                                    | **2,551**    |   |   | 1,226 |   |
| Excess                tax benefits related to stock-based compensation                                                  |   |                                    | **(2,035**   | **)** |   | 546 |   |
| Net                (gain)/loss from disposition of capital assets                                                       |   |                                    | **353**      |   |   | (873 | ) |
| Net                gain from securitization activities                                                                  |   |                                    | **(152**     | **)** |   | (816 | ) |
| Changes                in operating assets and liabilities                                                                   |   |                                    |         |   |   |   |   |
| Accounts                receivable                                                                                           |   |                                    | **30,118**   |   |   | 0 |   |
| Merchandise                inventories                                                                                       |   |                                    | **(72,206**  | **)** |   | (62,674 | ) |
| Accounts                payable                                                                                              |   |                                    | **49,720**   |   |   | 43,962 |   |
| Deferred                advertising                                                                                          |   |                                    | **(953**     | **)** |   | 0 |   |
| Prepayments                and other                                                                                         |   |                                    | **(11,127**  | **)** |   | (4,530 | ) |
| Income                taxes payable                                                                                          |   |                                    | **18,274**   |   |   | 3,942 |   |
| Accrued                expenses and other                                                                                    |   |                                    | **(6,160**   | **)** |   | 6,036 |   |
| **Net                cash provided by operating activities**                                                            |   |                                    | **58,937**   |   |   | 35,715 |   |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| **Investing                activities**                                                                                      |   |                                    |         |   |   |   |   |
| Investment                in capital assets                                                                             |   |                                    | **(23,854**  | **)** |   | (17,697 | ) |
| Proceeds                from sales of capital assets                                                                    |   |                                    | **0**        |   |   | 1,923 |   |
| Gross                purchases of securities                                                                            |   |                                    | **(3,251**   | **)** |   | (31,725 | ) |
| Proceeds                from sales of securities                                                                        |   |                                    | **9,463**    |   |   | 0 |   |
| Purchase                of Catherines                receivables portfolio                                              |   |                                    | **0**        |   |   | (56,582 | ) |
| Securitization                of Catherines                receivables portfolio                                        |   |                                    | **0**        |   |   | 56,582 |   |
| Increase                in other assets                                                                                 |   |                                    | **(7,042**   | **)** |   | (2,272 | ) |
| **Net                cash used by investing activities**                                                                |   |                                    | **(24,684**  | **)** |   | (49,771 | ) |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| **Financing                activities**                                                                                      |   |                                    |         |   |   |   |   |
| Proceeds                from short-term borrowings                                                                      |   |                                    | **96,418**   |   |   | 67,262 |   |
| Repayments                of short-term borrowings                                                                      |   |                                    | **(106,418** | **)** |   | (67,262 | ) |
| Repayments                of long-term borrowings                                                                       |   |                                    | **(3,766**   | **)** |   | (4,380 | ) |
| Excess                tax benefits related to stock-based compensation                                                  |   |                                    | **2,035**    |   |   | 0 |   |
| Proceeds                from issuance of common stock                                                                   |   |                                    | **2,223**    |   |   | 188 |   |
| **Net                cash used by financing activities**                                                                |   |                                    | **(9,508**   | **)** |   | (4,192 | ) |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| **Increase                (decrease) in cash and cash equivalents**                                                     |   |                                    | **24,745**   |   |   | (18,248 | ) |
| Cash                and cash equivalents, beginning of period                                                           |   |                                    | **130,132**  |   |   | 273,049 |   |
| **Cash                and cash equivalents, end of period**                                                             |   | **$**                                   | **154,877**  |   | $ | 254,801 |   |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| **Non-cash                financing and investing activities**                                                               |   |                                    |         |   |   |   |   |
| Equipment                acquired through capital leases                                                                |   | **$**                                   | **0**        |   | **$** | **0** |   |
|                                                                                                                         |   |                                    |         |   |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
|                                                                                                                         |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                 |

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Table          of Contents

**CHARMING              SHOPPES, INC. AND SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**Note      1.****Condensed      Consolidated Financial Statements**

***Segment      Reporting***

**,      **
**“Note      11. Segment Reporting”**

***Stock-based      Compensation***

**“Item      8. Financial Statements and Supplementary Data; Note 10. Stock Option and Stock      Incentive Plans”**
**“Note      11. Employee Stock Purchase Plan” **

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      1. Condensed Consolidated Financial Statements (Continued)**

|                                                                           |   |       |      | **Average** |   |                             |   |
|--------------------------------------------------------------------------------|--------|------------|-----------|-------------|--------|----------------------------------|--------|
|                                                                           |   | **Option** |      | **Option**  |   | **Option                Prices** |   |
|                                                                           |   | **Shares** |      | **Price**   |   | **Per                Share**     |   |
|                                                                           |   |       |      |        |   |                             |   |   |
| **Outstanding                at January 28, 2006**                             |   |       | 3,672,108 |        | $      | 5.82                             |   | $ | 1.00 |   | - |   | $ | 12.48 |   |
| Granted                **-**option                price equal to market price  |   |       | 1,233     |        |   | 13.84                            |   |   | 13.84 |   | - |   |   | 13.84 |   |
| Granted                **-**option                price less than market price |   |       | 31,600    |        |   | 1.00                             |   |   | 1.00 |   | - |   |   | 1.00 |   |
| Canceled/forfeited                                                             |   |       | (4,333    | )           |   | 2.94                             |   |   | 1.00 |   | - |   |   | 6.50 |   |
| Exercised                                                                      |   |       | (513,703  | )           |   | 6.01                             |   |   | 1.00 |   | - |   |   | 9.10 |   |
| **Outstanding                at April 29, 2006**                               |   |       | 3,186,905 |        | $      | 5.75                             |   | $ | 1.00 |   | - |   | $ | 13.84 |   |
| **Exercisable                at April 29, 2006**                               |   |       | 2,892,724 |        | $      | 5.79                             |   | $ | 1.00 |   | - |   | $ | 8.46 |   |

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation.”*

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      1. Condensed Consolidated Financial Statements (Continued)**

**“**
**Item      8. Financial Statements and Supplementary Data; Note 1. Summary of Significant      Accounting Policies; **
***Common      Stock Plans***
**”      **

*“Share-Based      Payment”*

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      1. Condensed Consolidated Financial Statements (Continued)**

*“Accounting      for Stock-based Compensation:”*

|                                                                                              |   | **Thirteen**                   |   |
|---------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                              |   | **Weeks                Ended** |   |
|                                                                                              |   | **April                30,**   |   |
| ***(In                thousands, except per share amounts)***                                     |   | **2005**                       |   |
|                                                                                              |   |                           |   |   |
| Net                income as reported                                                        |   | $                              | 30,017 |   |
| Add                stock-based employee compensation using intrinsic value                method, |   |                           |   |   |
| net                of income taxes                                                                |   |                           | 797    |   |
| Less                stock-based employee compensation using fair value method,                    |   |                           |   |   |
| net                of income taxes                                                                |   |                           | (1,057 | ) |
| Pro                forma net income                                                          |   | $                              | 29,757 |   |
|                                                                                              |   |                           |   |   |
| Basic                net income per share:                                                        |   |                           |   |   |
| As                reported                                                                   |   | $                              | .25    |   |
| Pro                forma                                                                     |   |                           | .25    |   |
| Diluted                net income per share:                                                      |   |                           |   |   |
| As                reported                                                                   |   |                           | .23    |   |
| Pro                forma                                                                     |   |                           | .23    |   |

**Note      2. Acquisition of Crosstown Traders, Inc.**

*“Business      Combinations,”*

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      2. Acquisition of Crosstown Traders, Inc. (Continued)**

*“Recognition      of Liabilities in Connection with a Purchase Business      Combination.”*

|                                                     |   |                           |   |                                    |   |                          |   |                         |   |
|----------------------------------------------------------|--------|--------------------------------|--------|-----------------------------------------|--------|-------------------------------|--------|------------------------------|--------|
|                                                     |   |                           |   |                                    |   |                          |   |                         |   |
|                                                     |   |                           |   | **Thirteen                Weeks Ended** |   |                          |   |
|                                                     |   | **Balance                at**  |   | **April                29, 2006**       |   | **Balance                at** |   |
|                                                     |   | **January                28,** |   |                                    |   | **Payments/**                 |   | **April                29,** |   |
| ***(In                thousands)***                      |   | **2006**                       |   | **Adjustments**                         |   | **Settlements**               |   | **2006**                     |   |
|                                                     |   |                           |   |                                    |   |                          |   |                         |   |   |   |   |   |
| Severance                and related costs          |   | $                              | 4,380  |                                    | $      | 0                             |   | $                            | (192   | ) | $ | 4,188 |   |
| Lease                termination and related costs  |   |                           | 2,180  |                                    |   | (290                          | )      |                         | 0      |   |   | 1,890 |   |
| Unfavorable                contract costs           |   |                           | 900    |                                    |   | 0                             |   |                         | 0      |   |   | 900 |   |
| Other                costs                          |   |                           | 1,154  |                                    |   | .0                            |   |                         | .0     |   |   | 1,154 |   |
| Total                                               |   | $                              | 8,614  |                                    | $      | (290                          | )      | $                            | (192   | ) | $ | 8,132 |   |

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      2. Acquisition of Crosstown Traders, Inc. (Continued)**

|                                                          |   | **Thirteen**                   |    |
|---------------------------------------------------------------|--------|--------------------------------|---------|
|                                                          |   | **Weeks                Ended** |    |
|                                                          |   | **April                30,**   |    |
| ***(In                thousands, except per share amounts)*** |   | **2005**                       |    |
|                                                          |   |                           |    |   |
| Net                sales                                 |   | $                              | 711,398 |   |
| Net                income                                |   |                           | 29,800  |   |
|                                                          |   |                           |    |   |
| Net                income per share:                          |   |                           |    |   |
| Basic                                                         |   | $                              | .25     |   |
| Diluted                                                       |   |                           | .23     |   |

**NOTE      3. Accounts Receivable**

|                                                 |   | **April                29,** |   | **January                28,** |   |
|------------------------------------------------------|--------|------------------------------|--------|--------------------------------|--------|
| ***(In                thousands)***                  |   | **2006**                     |   | **2006**                       |   |
|                                                 |   |                         |   |                           |   |   |   |
| Due                from customers               |   | $                            | 15,388 |                           | $      | 45,191 |   |
| Allowance                for doubtful accounts  |   |                         | (6,903 | )                              |   | (6,588 | ) |
| Net                accounts receivable          |   | $                            | 8,485  |                           | $      | 38,603 |   |

**Note      4. Trademarks and Other Intangible Assets**

|                                                                                                                                                    |   | **April                29,** |    | **January                28,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------------------------------|--------|
| ***(In                thousands)***                                                                                                                     |   | **2006**                     |    | **2006**                       |   |
|                                                                                                                                                    |   |                         |    |                           |   |   |   |
| Trademarks,                tradenames, and internet domain names                                                                                   |   | $                            | 240,300 |                           | $      | 238,800 |   |
| Customer                lists, customer relationships, and covenant not to compete                                                                 |   |                         | 16,400  |                           |   | 16,400 |   |
| Total                at cost                                                                                                                       |   |                         | 256,700 |                           |   | 255,200 |   |
| Less                accumulated amortization of customer lists, customer relationships,                and                covenant not to compete  |   |                         | 6,110   |                           |   | 5,126 |   |
| Net                trademarks and other intangible assets                                                                                          |   | $                            | 250,590 |                           | $      | 250,074 |   |

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      5. Short-term Borrowings and Long-term Debt**

|                                                         |   | **April                29,** |    | **January                28,** |   |
|--------------------------------------------------------------|--------|------------------------------|---------|--------------------------------|--------|
| ***(In                thousands)***                          |   | **2006**                     |    | **2006**                       |   |
|                                                         |   |                         |    |                           |   |   |   |
| **Short-term                borrowings**                     |   |                         |    |                           |   |   |   |
| Revolving                credit facility                     |   | $                            | 40,000  |                           | $      | 50,000 |   |
|                                                         |   |                         |    |                           |   |   |   |
| **Long-term                debt**                            |   |                         |    |                           |   |   |   |
| 4.75%                Senior Convertible Notes, due June 2012 |   | $                            | 150,000 |                           | $      | 150,000 |   |
| Capital                lease obligations                     |   |                         | 21,734  |                           |   | 24,825 |   |
| 6.07%                mortgage note, due October 2014         |   |                         | 12,132  |                           |   | 12,261 |   |
| 6.53%                mortgage note, due November 2012        |   |                         | 9,100   |                           |   | 9,450 |   |
| 7.77%                mortgage note, due December 2011        |   |                         | 8,916   |                           |   | 9,050 |   |
| Other                long-term debt                          |   |                         | 1,096   |                           |   | 1,158 |   |
| Total                long-term debt                          |   |                         | 202,978 |                           |   | 206,744 |   |
| Less                current portion                          |   |                         | 13,720  |                           |   | 14,765 |   |
| Long-term                debt                                |   | $                            | 189,258 |                           | $      | 191,979 |   |

**Note      6. Stockholders’ Equity**

|                                                                               |   | **Thirteen**                   |    |
|------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                               |   | **Weeks                Ended** |    |
|                                                                               |   | **April                29,**   |    |
| ***(Dollars                in thousands)***                                        |   | **2006**                       |    |
|                                                                               |   |                           |    |   |
| Total                stockholders’ equity, beginning of period               |   | $                              | 814,348 |   |
| Net                income                                                          |   |                           | 32,061  |   |
| Issuance                of common stock (599,450 shares)                           |   |                           | 2,223   |   |
| Stock-based                compensation expense                               |   |                           | 2,551   |   |
| Excess                tax benefits related to stock-based compensation             |   |                           | 2,035   |   |
| Unrealized                gains on available-for-sale securities, net of tax  |   |                           | 3       |   |
| Total                stockholders’ equity, end of period                     |   | $                              | 853,221 |   |

**Note      7. Customer Loyalty Card Programs**

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      8. Net Income Per Share**

|                                                                                    |   | **Thirteen                Weeks Ended** |    |
|-----------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                    |   | **April                29,**            |    | **April                30,** |   |
| ***(In                thousands, except per share amounts)***                           |   | **2006**                                |    | **2005** |   |
|                                                                                    |   |                                    |    |   |   |   |   |
| Basic                weighted average common shares outstanding                    |   |                                    | 121,813 |   |   | 118,984 |   |
| Dilutive                effect of assumed conversion of convertible notes          |   |                                    | 15,182  |   |   | 15,182 |   |
| Dilutive                effect of stock options and awards                         |   |                                    | 2,432   |   |   | 1,577 |   |
| Diluted                weighted average common shares and equivalents outstanding  |   |                                    | 139,427 |   |   | 135,743 |   |
|                                                                                    |   |                                    |    |   |   |   |   |
| Net                income                                                          |   | $                                       | 32,061  |   | $ | 30,017 |   |
| Decrease                in interest expense from assumed conversion of notes,      |   |                                    |    |   |   |   |   |
| net                of income taxes                                                      |   |                                    | 1,128   |   |   | 1,128 |   |
| Net                income used to determine diluted net income per share           |   | $                                       | 33,189  |   | $ | 31,145 |   |
|                                                                                    |   |                                    |    |   |   |   |   |
| Options                with weighted average exercise price greater than market         |   |                                    |    |   |   |   |   |
| price,                excluded from computation of net income per share:                |   |                                    |    |   |   |   |   |
| Number                of shares                                                         |   |                                    | 0       |   |   | 111 |   |
| Weighted                average exercise price per share                                |   | $                                       | 0.00    |   | $ | 8.28 |   |

**Note      9. Income Taxes**

**Note      10. Asset Securitization**

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      11. Segment Reporting**

**,      **

**“**
**Item      8. Financial Statements and Supplementary Data; Note 1. Summary of Significant      Accounting Policies” **

|                                                   |   | **Retail** |    | **Direct-to-** |   | **Corporate**                |   |             |    |
|--------------------------------------------------------|--------|------------|---------|----------------|--------|------------------------------|--------|------------------|---------|
| ***(In                thousands)***                    |   | **Stores** |    | **Consumer**   |   | **and                Other** |   | **Consolidated** |    |
|                                                   |   |       |    |           |   |                         |   |             |    |   |   |   |   |
| **Thirteen                weeks ended April 29, 2006** |   |       |    |           |   |                         |   |             |    |   |   |   |   |
| Net                sales                          |   | $          | 627,404 |           | $      | 107,405                      |   | $                | 113     |   | $ | 734,922 |   |
| Depreciation                and amortization      |   |       | 11,094  |           |   | 545                          |   |             | 8,519   |   |   | 20,158 |   |
| Income                before interest and taxes   |   |       | 60,287  |           |   | 2,972                        |   |             | (9,309  | ) |   | 53,950 |   |
| Interest                expense                   |   |       |    |           |   |                         |   |             | (4,124  | ) |   | (4,124 | ) |
| Income                tax provision               |   |       |    |           |   |                         |   |             | (17,765 | ) |   | (17,765 | ) |
| Net                income                         |   |       | 60,287  |           |   | 2,972                        |   |             | (31,198 | ) |   | 32,061 |   |
| Capital                expenditures               |   |       | 15,413  |           |   | 960                          |   |             | 7,481   |   |   | 23,854 |   |
|                                                   |   |       |    |           |   |                         |   |             |    |   |   |   |   |
| **Thirteen                weeks ended April 30, 2005** |   |       |    |           |   |                         |   |             |    |   |   |   |   |
| Net                sales                          |   | $          | 603,267 |           |   |                         |   | $                | 86      |   | $ | 603,353 |   |
| Depreciation                and amortization      |   |       | 10,494  |           |   |                         |   |             | 8,234   |   |   | 18,728 |   |
| Income                before interest and taxes   |   |       | 56,617  |           |   |                         |   |             | (5,309  | ) |   | 51,308 |   |
| Interest                expense                   |   |       |    |           |   |                         |   |             | (3,925  | ) |   | (3,925 | ) |
| Income                tax provision               |   |       |    |           |   |                         |   |             | (17,366 | ) |   | (17,366 | ) |
| Net                income                         |   |       | 56,617  |           |   |                         |   |             | (26,600 | ) |   | 30,017 |   |
| Capital                expenditures               |   |       | 13,912  |           |   |                         |   |             | 3,785   |   |   | 17,697 |   |

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Table          of Contents

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note      12. Impact of Recent Accounting Pronouncements**

*“Inventory      Costs - an Amendment of Accounting Research Bulletin No. 43, Chapter      4.”*

*“Accounting      Changes and Error Corrections.” *
*“Accounting      Changes,”*
*“Reporting      Accounting Changes in Interim Financial Statements - an amendment of APB Opinion      No. 28.”*

*“Accounting      for Rental Costs Incurred during a Construction Period.”*

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Table          of Contents

**Item      2.****Management’s Discussion and Analysis of Financial Condition 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. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A                slowdown in the United States economy, an uncertain economic outlook,                and                escalating energy costs could lead to reduced consumer demand for                our                products 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                may be unable to successfully integrate the operations of Crosstown                Traders, Inc. (“Crosstown Traders”) with the operations of Charming                Shoppes, Inc. In addition, we cannot assure the successful implementation                of our business plan for Crosstown                Traders. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                cannot assure the successful implementation of our business plan                for entry                into the outlet store distribution                channel. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                cannot assure the successful implementation of our business plan                for                increased profitability and growth in our Retail Stores or                Direct-to-Consumer segments. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our                business plan is largely dependent upon continued growth in the plus-size                women’s apparel market, which may not                occur. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | We                depend on key personnel, particularly our Chief Executive Officer,                Dorrit                J. Bern, and we may not be able to retain or replace these employees                or                recruit additional qualified                personnel. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                depend on our distribution and fulfillment centers, 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                distribution and fulfillment centers were to be disrupted for any                reason. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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. If we were unable to obtain                sufficient financing at an affordable cost, our ability to merchandise                our                stores, E-commerce, or catalog businesses would be adversely                affected. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Natural                disasters, as well as war, acts of terrorism, or the threat of either                may                negatively impact availability of merchandise and customer traffic                to our                stores, or otherwise adversely affect our                business. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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                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                may be unable to obtain adequate insurance for our operations at                a                reasonable cost. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|

| · | We                may be unable to protect our trademarks and other intellectual property                rights, which are important to our success and our competitive                position. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                may be unable to hire and retain a sufficient number of suitable                sales                associates at our stores. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our                manufacturers may be unable to manufacture and deliver merchandise                to us                in a timely manner or to meet our quality                standards. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our                Retail Stores segment sales are dependent 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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                may be unable to manage significant increases in certain costs, including                postage and paper, which could adversely affect our results of                operations. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Response                rates to our catalogs and access to new customers could decline,                which                would adversely affect our net sales and results of                operations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We                may be unable to successfully implement our plan to improve merchandise                assortments in our Retail Stores or Direct-to-Consumer                segments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | We                make certain significant assumptions, estimates, and projections                related                to the useful lives of our property, plant, and equipment and the                valuation of intangible assets related to acquisitions. The carrying                amount and/or useful life of these assets are subject to periodic                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                would                have an adverse impact on our reported results of                operations. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Changes                to existing accounting rules or the adoption of new rules could have                an                adverse impact on our reported results of                operations. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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 attest to whether or not                our                assessment is fairly stated in all material respects and to separately                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,                or                if our independent registered public accounting firm is unable to                timely                attest to our assessment, 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CRITICAL****ACCOUNTING POLICIES**

***Stock-based      Compensation***

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation.”*

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Table          of Contents

*“Share-Based      Payment”*

**“Item      1. Financial Statements (Unaudited); Notes to Condensed Consolidated Financial      Statements; Note 1. Condensed Consolidated Financial Statements;**
***Stock-based      Compensation***
**”**
**“Part      II, Item 8. Financial Statements and Supplementary Data; Notes to Consolidated      Financial Statements; Note 1. Summary of Significant Accounting Policies;**
***Common      Stock Plans***
**”**

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Table          of Contents

**RECENT****DEVELOPMENTS**

**RESULTS****OF OPERATIONS**

|                                                                                                                       |   |                                           |   | **Percentage**               |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|------------------------------|--------|
|                                                                                                                       |   | **Thirteen                Weeks Ended****(1)** |   | **Change**                   |   |
|                                                                                                                       |   | **April                29,**                   |   | **April                30,** |   | **From                Prior** |   |
|                                                                                                                       |   | **2006****(2)**                                |   | **2005**                     |   | **Period** |   |
|                                                                                                                       |   |                                           |   |                         |   |   |   |   |   |   |
| Net                sales                                                                                              |   |                                           | 100.0  | %                            |   | 100.0 | % |   | 21.8 | % |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                            |   |                                           | 67.9   |                         |   | 66.9 |   |   | 23.6 |   |
| Selling,                general, and administrative expenses                                                          |   |                                           | 24.9   |                         |   | 25.0 |   |   | 21.4 |   |
| Income                from operations                                                                                 |   |                                           | 7.1    |                         |   | 8.0 |   |   | 8.1 |   |
| Other                income                                                                                           |   |                                           | 0.2    |                         |   | 0.5 |   |   | (45.0 | ) |
| Interest                expense                                                                                       |   |                                           | 0.6    |                         |   | 0.7 |   |   | 5.1 |   |
| Income                tax provision                                                                                   |   |                                           | 2.4    |                         |   | 2.9 |   |   | 2.3 |   |
| Net                income                                                                                             |   |                                           | 4.4    |                         |   | 5.0 |   |   | 6.8 |   |
| ____________________                                                                                                  |   |                                           |   |                         |   |   |   |   |   |   |
| *(1)* *Results                may not add due to rounding.*                                                      |
| *(2)* *Includes                the results of operations of Crosstown Traders, acquired June 2,                2005.* |

|                                                                                                                             |   | **Thirteen                Weeks Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                                             |   | **April                29,**            |   | **April                30,** |   |
| ***(In                millions)***                                                                                               |   | **2006**                                |   | **2005** |   |
|                                                                                                                             |   |                                    |   |   |   |   |   |
| FASHION                BUG                                                                                                  |   | $                                       | 255.9  |   | $ | 256.5 |   |
| LANE                BRYANT                                                                                                  |   |                                    | 277.0  |   |   | 257.5 |   |
| CATHERINES                                                                                                                  |   |                                    | 94.5   |   |   | 89.3 |   |
| Total                Retail Stores segment sales                                                                            |   |                                    | 627.4  |   |   | 603.3 |   |
| Total                Direct-to-Consumer segment sales(1)                                                                    |   |                                    | 107.4  |   |   | 0.0 |   |
| Corporate                and other(2)                                                                                       |   |                                    | 0.1    |   |   | 0.1 |   |
| Total                net sales                                                                                              |   | $                                       | 734.9  |   | $ | 603.4 |   |
| ____________________                                                                                                        |   |                                    |   |   |   |   |   |
| *(1)* *Includes                the results of operations of Crosstown Traders, acquired June 2,                2005.*  |
| *(2)* *Revenue                related to loyalty card fees.*                                                                |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **Thirteen                Weeks Ended** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **April                29,**            |   | **April                30,** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **2006**                                |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| **Retail                Stores segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                    |   |   |   |   |   |
| Increase                (decrease) in comparable store sales(1)                :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    |   |   |   |   |   |
| Consolidated                retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                    | 1      | % |   | 0 | % |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | (1     | ) |   | (2 | ) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | 2      |   |   | 0 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | 5      |   |   | 4 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| Sales                from new stores and E-commerce as a percentage of total consolidated                prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                    |   |   |   |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | 2      |   |   | 1 |   |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | 5      |   |   | 4 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | 1      |   |   | 1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| Prior-period                sales from closed stores as a percentage of total consolidated                prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |   |   |   |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | (1     | ) |   | (2 | ) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | (1     | ) |   | (1 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | (1     | ) |   | (0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| Increase                in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                    | 4      |   |   | 2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| **Direct-to-Consumer                segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |   |   |   |   |   |
| Sales                as a percentage of total consolidated prior-period sales(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                    | 18     |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |
| Increase                in total net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                    | 22     |   |   | 2 |   |
| *____________________*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                    |   |   |   |   |   |
| *(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                catalog sales and catalog-related E-commerce sales from Crosstown                Traders,                acquired on June 2, 2005.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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|                                                                                                                                                                                                                                                                                                                                                  |   | **FASHION** |   | **LANE**   |   |           |   |      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|------------|--------|----------------|--------|-----------|--------|
|                                                                                                                                                                                                                                                                                                                                                  |   | **BUG**     |   | **BRYANT** |   | **CATHERINES** |   | **Total** |   |
|                                                                                                                                                                                                                                                                                                                                                  |   |        |   |       |   |           |   |      |   |   |   |   |   |
| **Fiscal                2007 Year-to-Date****(1)****:**                                                                                                                                                                                                                                                                                               |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                at January 28, 2006                                                                                                                                                                                                                                                                                                             |   |        | 1,025  |       |   | 748            |   |      | 463    |   |   | 2,236 |   |
|                                                                                                                                                                                                                                                                                                                                                  |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                opened                                                                                                                                                                                                                                                                                                                          |   |        | 0      |       |   | 8              |   |      | 5      |   |   | 13 |   |
| Stores                closed                                                                                                                                                                                                                                                                                                                          |   |        | (2     | )          |   | (4             | )      |      | (2     | ) |   | (8 | ) |
| Net                change in stores                                                                                                                                                                                                                                                                                                                   |   |        | (2     | )          |   | 4              |   |      | 3      |   |   | 5 |   |
|                                                                                                                                                                                                                                                                                                                                                  |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                at April 29, 2006                                                                                                                                                                                                                                                                                                               |   |        | 1,023  |       |   | 752            |   |      | 466    |   |   | 2,241 |   |
|                                                                                                                                                                                                                                                                                                                                                  |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                relocated during period                                                                                                                                                                                                                                                                                                         |   |        | 9      |       |   | 4              |   |      | 4      |   |   | 17 |   |
|                                                                                                                                                                                                                                                                                                                                                  |   |        |   |       |   |           |   |      |   |   |   |   |   |
| **Fiscal                2007:**                                                                                                                                                                                                                                                                                                                       |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Planned                store openings(2)                                                                                                                                                                                                                                                                                                              |   |        | 15     |       |   | 60             |   |      | 8      |   |   | 83 |   |
| Planned                store closings                                                                                                                                                                                                                                                                                                                 |   |        | 20     |       |   | 15             |   |      | 8      |   |   | 43 |   |
| Planned                store relocations                                                                                                                                                                                                                                                                                                              |   |        | 35     |       |   | 35             |   |      | 10     |   |   | 80 |   |
| *____________________*                                                                                                                                                                                                                                                                                                                           |   |        |   |       |   |           |   |      |   |   |   |   |   |
| *(1)* *Excludes                3 Crosstown Traders outlet stores.*                                                                                                                                                                                                                                                                          |
| *(2)* *In                addition, we plan to open**75-80                LANE BRYANT OUTLET stores under leases assumed from Retail Brand                Alliance                under an agreement effective April 1, 2006, which we expect to begin                opening in July 2006 (see **"RECENT DEVELOPMENTS**"                above).* |

**Comparison      of Thirteen Weeks Ended April 29, 2006 and April 30, 2005**

***Net      Sales***

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***Cost      of Goods Sold, Buying, Catalog, and Occupancy***

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***Selling,      General, and Administrative***

**“CRITICAL      ACCOUNTING POLICIES”**

***Other      Income***

***Income      Tax Provision***

**LIQUIDITY****AND CAPITAL RESOURCES**

|                                                |   | **April                29,** |   | **January                28,** |   |
|-----------------------------------------------------|--------|------------------------------|--------|--------------------------------|--------|
| ***(Dollars                in millions)***          |   | **2006**                     |   | **2006**                       |   |
|                                                |   |                         |   |                           |   |   |   |
| Cash                and cash equivalents       |   | $                            | 154.9  |                           | $      | 130.1 |   |
| Available-for-sale                securities   |   |                         | 11.8   |                           |   | 20.2 |   |
| Working                capital                 |   | $                            | 370.5  |                           | $      | 338.6 |   |
| Current                ratio                   |   |                         | 1.8    |                           |   | 1.8 |   |
| Long-term                debt to equity ratio  |   |                         | 22.2   | %                              |   | 23.6 | % |

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**“CRITICAL      ACCOUNTING POLICIES”**

***Capital      Expenditures***

***Dividends***

***Off-Balance-Sheet      Financing***

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Table          of Contents

| **(Dollars                in millions)**                                                                                                                                                                                                                                                                                                                                                                                            | **Series                1999-2** | **Series                2002-1** | **Series                2004**   | **Series                2004-1** | **2005-RPA**(1)                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                |                             |                             |                             |                             |                             |
| Date                of facility                                                                                                                                                                                                                                                                                                                                                                                                     | May                1999          | November                2002     | January                2004      | August                2004       | May                2005          |
| Type                of facility                                                                                                                                                                                                                                                                                                                                                                                                     | Conduit                          | Term                             | Conduit                          | Term                             | Conduit                          |
| Maximum                funding                                                                                                                                                                                                                                                                                                                                                                                                      | $50.0                            | $100.0                           | $50.0                            | $180.0                           | $55.0                            |
| Funding                as of April 29, 2006                                                                                                                                                                                                                                                                                                                                                                                         | $12.0                            | $100.0                           | $0.0                             | $180.0                           | $52.0                            |
| First                scheduled principal payment                                                                                                                                                                                                                                                                                                                                                                                    | Not                applicable    | August                2007       | Not                applicable    | April                2009        | Not                applicable    |
| Expected                final principal payment                                                                                                                                                                                                                                                                                                                                                                                     | Not                applicable(2) | May                2008          | Not                applicable(2) | March                2010        | Not                applicable(2) |
| Renewal                                                                                                                                                                                                                                                                                                                                                                                                                             | Annual                           | Not                applicable    | Annual                           | Not                applicable    | Annual                           |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                           |                             |                             |                             |                             |                             |
| *(1)* *Receivables                Purchase Agreement.*                                                                                                                                                                                                                                                                                                                                                                    |
| *(2)* *Series                1999-2 and Series 2004 have scheduled final payment dates that occur                in                the twelfth month following the month in which the series begins                amortizing. These series and 2005-RPA generally begin amortizing                364 days                after start of the purchase commitment by the series purchaser currently                in effect.* |

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**“Part      II, Item 7. Management’s Discussion and Analysis of Financial Condition and      Results of Operations” **
**“Part      II, Item 8. Financial Statements and Supplementary Data; Notes to Consolidated      Financial Statements; Note 17. Asset Securitization”**

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; Note 18. Leases”**

**FINANCING**

***Revolving      Credit Facility***

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**“Part      II, Item 7. Management’s Discussion and Analysis of Financial Condition and      Results of Operations”**
**“Part      II, Item 8. Financial Statements and Supplementary Data; Notes to Consolidated      Financial Statements; Note 8. Short-term Borrowings and Long-term      Debt”**

**MARKET      RISK**

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**IMPACT****OF RECENT ACCOUNTING PRONOUNCEMENTS**

**“Item      1. Notes To Condensed Consolidated Financial Statements (Unaudited); Note 12.      Impact of Recent Accounting Pronouncements”**

**Item      3.****Quantitative and Qualitative Disclosures About Market      Risk**

**“Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations; MARKET RISK,”**

**Item      4.****Controls and Procedures**

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**PART      II.****OTHER      INFORMATION**

**Item      1.****Legal Proceedings**

**Item      1A****.      Risk Factors**

**“Part      I; Item 2. Management’s Discussion and Analysis of Financial Condition and      Results of Operations; **
**RECENT      DEVELOPMENTS**
**”**

**“Part      I; Item 1A. Risk Factors”**

**“Part      I; Item 1A. Risk Factors”**
**“Part      I; Item 2. Management’s Discussion and Analysis of Financial Condition and      Results of Operations; **
**FORWARD-LOOKING      STATEMENTS**
**”**

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**Item      2.****Unregistered Sales of Equity Securities and Use of      Proceeds**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |   |   |                           |   | **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)                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |   |   |                                |   |                                |   |                           |   |   |   |   |   |
| January                28, 2006 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         |   |   |                                |   |                                |   |                           |   |   |   |   |   |
| February                25, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                         | 19,826 | (1)    |                                | $      | 13.39                               |   |                           | -      |   |   | - |   |
| February                26, 2006 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                         |   |   |                                |   |                                |   |                           |   |   |   |   |   |
| April                1, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                         | 10,540 | (1)    |                                |   | 13.63                               |   |                           | -      |   |   | - |   |
| April                2, 2006 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |   |   |                                |   |                                |   |                           |   |   |   |   |   |
| April                29, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         | 46,243 | (1)    |                                |   | 13.96                               |   |                           | -      |   |   | - |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                         | 76,609 |   |                                | $      | 13.77                               |   |                           | -      |   |   | - |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| *(1)* *Shares                withheld for the payment of payroll taxes on employee stock awards                that                vested during the period.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *(2)* *In                Fiscal 1998, we publicly announced that our Board of Directors granted                authority to repurchase up to 10,000,000 shares of our common stock.                In                Fiscal 2000, we publicly announced that our Board of Directors granted                authority to repurchase up to an additional 10,000,000 shares of                our                common stock. In Fiscal 2003, the Board of Directors granted an additional                authorization to repurchase 6,350,662 shares of common stock issued                to                Limited Brands in connection with our acquisition of LANE BRYANT.                From                Fiscal 1998 through Fiscal 2003, we repurchased a total of 21,370,993                shares of common stock, which included shares purchased on the open                market                as well as shares repurchased from Limited Brands. As of July 30,                2005,                4,979,669 shares of our common stock remain available for repurchase                under                these programs. Our revolving credit facility allows the repurchase                of our                common stock subject to maintaining a minimum level of Excess Availability                (as defined in the facility agreement) immediately before and after                such                repurchase. As conditions may allow, we may from time to time acquire                additional shares of our common stock under these programs. Such                shares,                if purchased, would be held as treasury shares. No shares were acquired                under these programs during the thirteen weeks ended April 29, 2006.                The                repurchase programs have 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. (Exhibit 2.1).  |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1  | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,                Exhibit 3.1).                                                                                                                                                                                                                                                                                              |

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| 3.2   | Bylaws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999 (File No. 000-07258,                Exhibit 3.2).  |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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.                                                          |

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**SIGNATURES**

|                                   | **CHARMING                SHOPPES, INC.**            |
|----------------------------------------|------------------------------------------------------|
|                                   | (Registrant)                                         |
|                                   |                                                 |
|                                   |                                                 |
|                                   |                                                 |
| Date: June                2, 2006 | **/S/                DORRIT J. BERN**                |
|                                   | Dorrit                J. Bern                        |
|                                   | Chairman                of the Board                 |
|                                   | President                and Chief Executive Officer |
|                                   |                                                 |
|                                   |                                                 |
|                                   |                                                 |
| Date: June                2, 2006 | **/S/                ERIC M. SPECTER**               |
|                                   | Eric                M. Specter                       |
|                                   | Executive                Vice President              |
|                                   | Chief                Financial Officer               |

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**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. (Exhibit 2.1).  |
| 3.1                             | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,                Exhibit 3.1).                                                                                                                                                                                                                                                                                                            |
| 3.2                             | Bylaws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999 (File No. 000-07258,                Exhibit 3.2).                                                                                                                                                                                                                                                                                                                      |
| 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.                                                                                                                                                                                                                                                                                                                                                                              |

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