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Table of Contents

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|   | 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) |   |

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

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Table of Contents

TABLE OF CONTENTS

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Page   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART      I.  | FINANCIAL      INFORMATION                                                                                                                     | 2      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      1.  | Financial Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Condensed      Consolidated Balance Sheets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|          | November 1, 2008 and February 2,      2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Condensed      Consolidated Statements of Operations and Comprehensive    Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|          | Thirteen weeks ended November 1, 2008 and November 3,      2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 3      |
|          | Thirty-nine weeks ended November 1, 2008 and November      3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 4      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Condensed      Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Thirty-nine weeks ended November 1, 2008 and November 3,      2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 5      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Notes to Condensed Consolidated Financial      Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 7      |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      2.  | Management’s Discussion and Analysis of Financial      Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 27     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Forward-looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 27     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 30     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Recent Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 31     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 33     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 35     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 44     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 49     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 51     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Impact of Recent Accounting      Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 52     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      3.  | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 52     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      4.  | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 52     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART      II. | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 53     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      1.  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 53     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      1A. | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 53     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      2.  | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 54     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| Item      6.  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 55     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | SIGNATURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 58     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|          | Exhibit Index                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 59     |

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Table of Contents

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | November      1, |                |   | February      2, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------------------|--------|------------------|--------|
| (In      thousands, except share amounts)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2008             |                |   | 2008             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |             |                |   |             |   |
| Current      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             |                |   |             |   |
| Cash      and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                | 67,829              |   |             | $      | 61,335 |   |
| Available-for-sale      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |             | 6,375               |   |             |   | 13,364 |   |
| Accounts      receivable, net of allowances of $1,579 and $6,262                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |             | 4,477               |   |             |   | 33,535 |   |
| Investment      in asset-backed securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |             | 112,801             |   |             |   | 115,912 |   |
| Merchandise      inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |             | 406,102             |   |             |   | 330,216 |   |
| Deferred      advertising                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |             | 12,908              |   |             |   | 5,546 |   |
| Deferred      taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 0                   |   |             |   | 9,773 |   |
| Prepayments      and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |             | 177,765             |   |             |   | 151,716 |   |
| Current      assets of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |             |   0       |   |             |   | 119,994 |   |
| Total      current      assets                                                                                                |   |             |   788,257 |   |             |   | 841,391 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| Property,      equipment, and leasehold improvements – at cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             | 1,075,629           |   |             |   | 1,117,559 |   |
| Less      accumulated depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 657,884             |   |             |   | 658,410 |   |
| Net      property, equipment, and leasehold improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |             | 417,745             |   |             |   | 459,149 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| Trademarks      and other intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |             | 189,021             |   |             |   | 189,562 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |             | 66,666              |   |             |   | 66,666 |   |
| Other      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |             |   31,801  |   |             |   | 56,536 |   |
| Total      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                | 1,493,490           |   |             | $      | 1,613,304 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |             |                |   |             |   |   |   |
| Current      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |             |                |   |             |   |   |   |
| Accounts      payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                | 177,102             |   |             | $      | 122,629 |   |
| Accrued      expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |             | 190,447             |   |             |   | 168,573 |   |
| Current      liabilities of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 0                   |   |             |   | 46,086 |   |
| Current      portion – long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |             |   6,601   |   |             |   | 8,827 |   |
| Total      current      liabilities                                                                                           |   |             |  374,150       |   |             |   | 346,115 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| Deferred      taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 42,465              |   |             |   | 38,122 |   |
| Other      non-current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |             | 192,525             |   |             |   | 192,454 |   |
| Long-term      debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |             | 307,649             |   |             |   | 306,169 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| Stockholders’      equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |             |                |   |             |   |   |   |
| Common      Stock $.10 par value:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |             |                |   |             |   |   |   |
| Authorized      – 300,000,000 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |             |                |   |             |   |   |   |
| Issued      – 152,352,569 shares and 151,569,850 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |             | 15,235              |   |             |   | 15,157 |   |
| Additional      paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |             | 414,127             |   |             |   | 407,499 |   |
| Treasury      stock at cost – 38,482,213 shares and 36,477,246 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |             | (347,730            | )      |             |   | (336,761 | ) |
| Accumulated      other comprehensive income/(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |             | (2                  | )      |             |   | 22 |   |
| Retained      earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |             | 495,071             |   |             |   | 644,527 |   |
| Total      stockholders’      equity                                                                                    |   |             | 576,701             |   |             |   | 730,444 |   |
| Total      liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                | 1,493,490           |   |             | $      | 1,613,304 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |             |                |   |             |   |   |   |
| 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                                     |   | Thirteen Weeks Ended |        |
|----------------------------------------------------------------------------------------------------------|--------|----------------------|-------------|
|                                                                                                     |   | November      1,     |        |   | November      3, |   |
| (In      thousands, except per share amounts)                                                            |   | 2008                 |        |   | 2007 |   |
|                                                                                                     |   |                 |        |   |   |   |
| Net      sales                                                                                           |   | $                    | 553,066     |   |   | $ | 599,665 |   |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Cost      of goods sold, buying, catalog, and occupancy expenses                                         |   |                 | 428,338     |   |   |   | 429,175 |   |
| Selling,      general, and administrative expenses                                                       |   |                 | 167,585     |   |   |   | 172,423 |   |
| Impairment      of store assets                                                                          |   |                 | 20,216      |   |   |   | 0 |   |
| Restructuring      and other charges                                                                     |   |                 |  5,685 |   |   |   |   0 |   |
| Total      operating expenses                                                                            |   |                 | 621,824     |   |   |   | 601,598 |   |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Loss      from operations                                                                                |   |                 | (68,758     | ) |   |   | (1,933 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Other      income                                                                                        |   |                 | 1,876       |   |   |   | 2,686 |   |
| Interest      expense                                                                                    |   |                 | (2,172      | ) |   |   | (2,206 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Loss from      continuing operations before income taxes                                            |   |                 | (69,054     | ) |   |   | (1,453 | ) |
| Income      tax (benefit)/provision                                                                      |   |                 | (11,269     | ) |   |   |  287 |   |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Loss      from continuing operations                                                                     |   |                 | (57,785     | ) |   |   | (1,740 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Loss      from discontinued operations, net of income tax      (provision)/benefit                       |   |                 |        |   |   |   |   |   |
| of ($24,004) in 2008 and $1,365      in 2007                                                             |   |                 | (35,181     | ) |   |   | (1,828 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Net      loss                                                                                            |   |                 | (92,966     | ) |   |   | (3,568 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Other      comprehensive income, net of tax                                                              |   |                 |        |   |   |   |   |   |
| Unrealized      gains on available-for-sale securities, net of income tax                                |   |                 |        |   |   |   |   |   |
| provision of $8 in      2007                                                                             |   |                 | 0           |   |   |   |  15 |   |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Comprehensive      loss                                                                                  |   | $                    | (92,966     | ) |   | $ | (3,553 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Basic      net loss per share:                                                                           |   |                 |        |   |   |   |   |   |
| Loss      from continuing operations                                                                     |   | $                    | (.50        | ) |   | $ | (.01 | ) |
| Loss      from discontinued operations, net of tax                                                       |   |                 | (.31        | ) |   |   | (.02 | ) |
| Net      loss                                                                                            |   | $                    | (.81        | ) |   | $ | (.03 | ) |
|                                                                                                     |   |                 |        |   |   |   |   |   |
| Diluted      net loss per share:                                                                         |   |                 |        |   |   |   |   |   |
| Loss      from continuing operations                                                                     |   | $                    | (.50        | ) |   | $ | (.01 | ) |
| Loss      from discontinued operations, net of tax                                                       |   |                 | (.31        | ) |   |   | (.02 | ) |
| Net      loss                                                                                            |   | $                    | (.81        | ) |   | $ | (.03 | ) |
|                                                                                                     |   |
| 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                                     |   | Thirty-nine      Weeks Ended |                        |
|----------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------------------------|
|                                                                                                     |   | November      1,             |                        |   | November      3, |   |
| (In      thousands, except per share amounts)                                                            |   | 2008                         |                        |   | 2007 |   |
|                                                                                                     |   |                         |                        |   |   |   |
| Net      sales                                                                                           |   | $                            | 1,843,028                   |   |   | $ | 1,990,638 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Cost      of goods sold, buying, catalog, and occupancy expenses                                         |   |                         | 1,349,389                   |   |   |   | 1,387,562 |   |
| Selling,      general, and administrative expenses                                                       |   |                         | 519,375                     |   |   |   | 528,744 |   |
| Impairment      of store assets                                                                          |   |                         | 20,216                      |   |   |   | 0 |   |
| Restructuring      and other charges                                                                     |   |                         |   24,241          |   |   |   |   0 |   |
| Total      operating expenses                                                                            |   |                         | 1,913,221                   |   |   |   | 1,916,306 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Income/(loss)      from operations                                                                       |   |                         | (70,193                     | ) |   |   | 74,332 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Other      income                                                                                        |   |                         | 3,183                       |   |   |   | 7,787 |   |
| Interest      expense                                                                                    |   |                         |   (6,742          | ) |   |   |   (8,287 | ) |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Income/(loss) from      continuing operations before income taxes                                   |   |                         | (73,752                     | ) |   |   | 73,832 |   |
| Income      tax (benefit)/provision                                                                      |   |                         |         (12,914   | ) |   |   |  28,212 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Income/(loss)      from continuing operations                                                            |   |                         | (60,838                     | ) |   |   | 45,620 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Loss      from discontinued operations, net of income tax benefit of $3,628 in      2007                 |   |                         | (74,922                     | ) |   |   | (4,611 | ) |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Net      income/(loss)                                                                                   |   |                         | (135,760                    | ) |   |   | 41,009 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Other      comprehensive income/(loss), net of tax                                                       |   |                         |                        |   |   |   |   |   |
| Unrealized      gains/(losses) on available-for-sale securities, net of income      tax                  |   |                         |                        |   |   |   |   |   |
| (provision)/benefit of $12 in      2008 and ($11) in 2007                                                |   |                         |     (24 | ) |   |   |  17 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Comprehensive      income/(loss)                                                                         |   | $                            | (135,784                    | ) |   | $ | 41,026 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Basic      net income/(loss) per share:                                                                  |   |                         |                        |   |   |   |   |   |
| Income/(loss)      from continuing operations                                                            |   | $                            | (.53                        | ) |   | $ | .37 |   |
| Loss      from discontinued operations, net of tax                                                       |   |                         | (.65                        | ) |   |   | (.04 | ) |
| Net      income/(loss)                                                                                   |   | $                            | (1.18                       | ) |   | $ | .33 |   |
|                                                                                                     |   |                         |                        |   |   |   |   |   |
| Diluted      net income/(loss) per share:                                                                |   |                         |                        |   |   |   |   |   |
| Income/(loss)      from continuing operations                                                            |   | $                            | (.53                        | ) |   | $ | .36 |   |
| Loss      from discontinued operations, net of tax                                                       |   |                         | (.65                        | ) |   |   | (.04 | ) |
| Net      income/(loss)                                                                                   |   | $                            | (1.18                       | ) |   | $ | .32 |   |
|                                                                                                     |   |
| 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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Thirty-nine      Weeks Ended |                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | November      1,             |                          |   | November      3, |   |
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2008                         |                          |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |                          |   |   |   |
| Operating      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                         |                          |   |   |   |
| Net      income/(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                            | (135,760                      | ) |   | $ | 41,009 |   |
| Adjustments      to reconcile net income/(loss) to net cash provided by operating      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                         |                          |   |   |   |   |   |
| Depreciation      and      amortization                                                                                                                            |   |                         | 73,774                        |   |   |   | 69,492 |   |
| Loss      on disposition of discontinued      operations                                                                                                           |   |                         | 46,736                        |   |   |   | 0 |   |
| Impairment      of store      assets                                                                                                                               |   |                         | 20,216                        |   |   |   | 0 |   |
| Deferred      income      taxes                                                                                                                                    |   |                         | 13,428                        |   |   |   | 8,856 |   |
| Stock-based      compensation                                                                                                                                      |   |                         | 4,708                         |   |   |   | 8,494 |   |
| Excess      tax benefits related to stock-based      compensation                                                                                                  |   |                         | 0                             |   |   |   | (847 | ) |
| Write-down      of deferred taxes related to stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         | (1,352                        | ) |   |   | 0 |   |
| Write-down      of capital      assets                                                                                                                             |   |                         | 2,456                         |   |   |   | 0 |   |
| Net      (gain)/loss from disposition of capital      assets                                                                                                       |   |                         | (722                          | ) |   |   | 1,926 |   |
| Net      loss/(gain) from securitization      activities                                                                                                           |   |                         | 531                           |   |   |   | (7,486 | ) |
| Changes      in operating assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |                          |   |   |   |   |   |
| Accounts      receivable,      net                                                                                                                                                     |   |                         | 29,058                        |   |   |   | 29,807 |   |
| Merchandise      inventories                                                                                                                                                           |   |                         | (65,430                       | ) |   |   | (68,763 | ) |
| Accounts      payable                                                                                                                                                                  |   |                         | 51,768                        |   |   |   | 15,778 |   |
| Deferred      advertising                                                                                                                                                              |   |                         | (5,317                        | ) |   |   | (10,423 | ) |
| Prepayments      and      other                                                                                                                                                        |   |                         | (6,005                        | ) |   |   | 980 |   |
| Accrued      expenses and      other                                                                                                                                                   |   |                         | (8,971                        | ) |   |   | 15,278 |   |
| Purchase      of Lane Bryant credit card receivables portfolio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                         | 0                             |   |   |   | (230,975 | ) |
| Securitization      of Lane Bryant credit card receivables portfolio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |   0                 |   |   |   | 230,975 |   |
| Net      cash provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                         |    19,118      |   |   |   | 104,101 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |                          |   |   |   |   |   |
| Investing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                         |                          |   |   |   |   |   |
| Investment      in capital assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                         | (49,498                       | ) |   |   | (108,775 | ) |
| Proceeds      from sales of capital assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         | 4,813                         |   |   |   | 0 |   |
| Net      proceeds from sale of discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                         | 34,440                        |   |   |   | 0 |   |
| Gross      purchases of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                         | (3,935                        | ) |   |   | (73,089 | ) |
| Proceeds      from sales of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                         | 11,651                        |   |   |   | 2,206 |   |
| (Increase)/decrease      in other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         |    6,635       |   |   |   | (15,650 | ) |
| Net      cash provided by/(used by) investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         |     4,106 |   |   |   | (195,308 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |                          |   |   |   |   |   |
| Financing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                         |                          |   |   |   |   |   |
| Proceeds      from issuance of senior convertible notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         | 0                             |   |   |   | 275,000 |   |
| Proceeds      from long term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         | 108                           |   |   |   | 986 |   |
| Repayments      of long-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         | (6,813                        | ) |   |   | (9,044 | ) |
| Payments      of deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                         | (47                           | ) |   |   | (7,611 | ) |
| Excess      tax benefits related to stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                         | 0                             |   |   |   | 847 |   |
| Purchase      of hedge on senior convertible notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                         | 0                             |   |   |   | (90,475 | ) |
| Sale      of common stock warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                         | 0                             |   |   |   | 53,955 |   |
| Purchases      of treasury stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         | (10,969                       | ) |   |   | (240,289 | ) |
| Net      proceeds from shares issued under employee stockplans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                         |    484         |   |   |   |   389 |   |
| Net      cash used by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         |  (17,237                 | ) |   |   | (16,242 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                         |                          |   |   |   |   |   |
| Increase/(decrease) in      cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         | 5,987                         |   |   |   | (107,449 | ) |
| Cash      and cash equivalents, beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                         |   61,842            |   |   |   | 143,838 |   |
| Cash      and cash equivalents, end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                            | 67,829                        |   |   | $ | 36,389 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| Certain      prior-year amounts have been reclassified to conform to the current-year      presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|  (Continued      on next page)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |

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|                                                          |   | Thirty-nine      Weeks Ended |   |
|---------------------------------------------------------------|--------|------------------------------|--------|
|                                                          |   | November      1,             |   |   | November      3, |   |
| (In      thousands)                                           |   | 2008                         |   |   | 2007 |   |
|                                                          |   |                         |   |   |   |   |
| Non-cash      financing and investing activities              |   |                         |   |   |   |   |
| Common      stock issued on redemption of convertible notes   |   | $                            | 0      |   |   | $ | 149,564 |   |
| Assets      acquired through capital leases                   |   | $                            | 5,959  |   |   | $ | 5,509 |   |
|                                                          |   |
| See      Notes to Condensed Consolidated Financial Statements |   |

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Note 1. Condensed Consolidated FinancialStatements

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|                                                                                                                                                                                           |   | Thirteen Weeks Ended |    |   | Thirty-nine Weeks Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                                           |   | November      1,     |    |   | November      3,        |   |   | November      1, |   |   | November      3, |   |
| (In      thousands)                                                                                                                                                                            |   | 2008(1)              |    |   | 2007                    |   |   | 2008(1) |   |   | 2007 |   |
|                                                                                                                                                                                           |   |                 |    |   |                    |   |   |   |   |   |   |   |
| Net      sales                                                                                                                                                                                 |   | $                    | 34,563  |   |                    | $      | 69,724 |   |   | $ | 155,811 |   |   | $ | 234,388 |   |
|                                                                                                                                                                                           |   |                 |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from discontinued operations                                                                                                                                                         |   | $                    | (11,177 | )(2)   |                    | $      | (3,193 | ) |   | $ | (74,922 | )(3) |   | $ | (8,239 | ) |
| Income      tax benefit                                                                                                                                                                        |   |                 | (24,004 | )(4)   |                    |   | 1,365 |   |   |   | 0 |   |   |   | 3,628 |   |
| Loss      from discontinued operations, net of income tax benefit                                                                                                                              |   | $                    | (35,181 | )      |                    | $      | (1,828 | ) |   | $ | (74,922 | ) |   | $ | (4,611 | ) |
| ____________________                                                                                                                                                                           |   |
| (1)       Through September 18, 2008 (the date of sale).                                                                                                                                  |   |
| (2)       Includes $7,209,000 of losses from operations and an increase of      $3,968,000 in the loss on disposition.                                                                    |   |
| (3)       Includes $28,186,000 of losses from operations and a $46,736,000 loss on      disposition.                                                                                      |   |
| (4)       Reversal of previously recognized tax benefit as a result of our      recognition of a valuation allowance against net deferred tax assets and      the correction of an error. |   |

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|                                                |   | September      18, |               |   | February      2, |   |
|-----------------------------------------------------|--------|--------------------|--------------------|--------|------------------|--------|
| (In      thousands)                                 |   | 2008               |               |   | 2008             |   |
|                                                |   |               |               |   |             |   |
| Current      assets:                                |   |               |               |   |             |   |
| Merchandise      inventories                        |   | $                  | 50,855             |   |             | $      | 61,311 |   |
| Deferred      advertising and other, net            |   |               | 13,594             |   |             |   | 13,286 |   |
| Intangible      assets                              |   |               | 44,758             |   |             |   | 45,397 |   |
| Current      assets of discontinued operations      |   | $                  | 109,207            |   |             | $      | 119,994 |   |
|                                                |   |               |               |   |             |   |   |   |
| Current      liabilities:                           |   |               |               |   |             |   |   |   |
| Accounts      payable                               |   | $                  | 15,219             |   |             | $      | 17,924 |   |
| Accrued      expenses                               |   |               | 4,192              |   |             |   | 10,884 |   |
| Deferred      taxes                                 |   |               |   18,820 |   |             |   | 17,278 |   |
| Current      liabilities of discontinued operations |   | $                  |  38,231       |   |             | $      | 46,086 |   |

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| 2004      Stock Award and Incentive Plan           |   |   | 4,744,437 |   |
|----------------------------------------------------|--------|--------|-----------|--------|
| 2003      Non-Employee Directors Compensation Plan |   |   | 155,924   |   |
| 1994      Employee Stock Purchase Plan             |   |   | 874,664   |   |
| 1988      Key Employee Stock Option Plan           |   |   | 104,292   |   |

|                                                                 |   |   |       |   |    |   |   |               |   |   | Aggregate     |   |
|----------------------------------------------------------------------|--------|--------|------------|--------|---------|--------|--------|--------------------|--------|--------|---------------|--------|
|                                                                 |   |   |       |   | Average |   |   |               |   |   | Intrinsic     |   |
|                                                                 |   | Option |       |   | Option  |   |   | Option      Prices |   |   | Value(1)      |   |
|                                                                 |   | Shares |       |   | Price   |   |   | Per Share          |   |   |  (000's) |   |
|                                                                 |   |   |       |   |    |   |   |               |   |   |          |   |   |   |   |   |   |
| Outstanding      at February 2, 2008                                 |   |   | 1,894,874  |   |    | $      | 5.95   |               |   | $      | 1.00          |   | – |   | $ | 13.84 |   |   | $ | 1,777 |   |
| Granted      – option price      equal to market price         |   |   | 3,255,674  |   |    |   | 4.79   |               |   |   | 1.13          |   | – |   |   | 5.64 |   |   |   |   |   |
| Granted      – option price      less than market price        |   |   | 14,000     |   |    |   | 1.00   |               |   |   | 1.00          |   | – |   |   | 1.00 |   |   |   |   |   |
| Canceled/forfeited                                                   |   |   | (1,061,581 | )      |    |   | 5.10   |               |   |   | 1.00          |   | – |   |   | 12.48 |   |   |   |   |   |
| Exercised                                                            |   |   | (234,198   | )      |    |   | 4.02   |               |   |   | 1.00          |   | – |   |   | 5.47 |   |   |   | 357 | (2) |
| Outstanding      at November 1, 2008                                 |   |   | 3,868,769  |   |    | $      | 5.31   |               |   | $      | 1.00          |   | – |   | $ | 13.84 |   |   | $ | 0 |   |
| Exercisable      at November 1, 2008                                 |   |   | 1,718,283  |   |    | $      | 6.22   |               |   | $      | 1.00          |   | – |   | $ | 13.84 |   |   | $ | 0 |   |
| ____________________                                                 |   |
| (1)       Aggregate market value less aggregate exercise price. |   |
| (2)       As of date of exercise.                               |   |

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|                                                                                                                              |   | Thirteen Weeks Ended |   |   | Thirty-nine      Weeks Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------------|--------|
|                                                                                                                              |   | November      1,     |   |   | November      3,             |   |   | November      1, |   |   | November      3, |   |
| (In      thousands)                                                                                                               |   | 2008                 |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                              |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Total      stock-based compensation expense                                                                                       |   | $                    | (306   | )(1)   |                         | $      | 734 |   |   | $ | 4,708 | (1) |   | $ | 8,494 |   |
| ____________________                                                                                                              |   |
| (1)       Includes $955 reversal of previously recognized stock-based compensation      related to performance-based awards. |   |

|                                 |   | November      1, |   |   | February      2, |   |
|--------------------------------------|--------|------------------|--------|--------|------------------|--------|
| (In      thousands)                  |   | 2008             |   |   | 2008             |   |
|                                 |   |             |   |   |             |   |
| Due      from customers              |   | $                | 6,056  |   |             | $      | 39,797 |   |
| Allowance      for doubtful accounts |   |             | (1,579 | )      |             |   | (6,262 | ) |
| Net      accounts receivable         |   | $                | 4,477  |   |             | $      | 33,535 |   |

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|                                                                     |   | November      1, |    |   | February      2, |   |
|--------------------------------------------------------------------------|--------|------------------|---------|--------|------------------|--------|
| (In      thousands)                                                      |   | 2008             |    |   | 2008             |   |
|                                                                     |   |             |    |   |             |   |
| Trademarks,      tradenames, and internet domain names                   |   | $                | 188,608 |   |             | $      | 188,608 |   |
| Customer      lists, customer relationships, and covenant not to compete |   |             | 6,172   |   |             |   | 6,172 |   |
| Total      at cost                                                       |   |             | 194,780 |   |             |   | 194,780 |   |
| Less      accumulated amortization of customer lists, customer           |   |             |    |   |             |   |   |   |
| relationships, and covenant not      to compete                          |   |             | 5,759   |   |             |   | 5,218 |   |
| Net      trademarks and other intangible assets                          |   | $                | 189,021 |   |             | $      | 189,562 |   |

|                                               |   | November      1, |    |   | February      2, |   |
|----------------------------------------------------|--------|------------------|---------|--------|------------------|--------|
| (In      thousands)                                |   | 2008             |    |   | 2008             |   |
|                                               |   |             |    |   |             |   |
| Long-term      debt                                |   |             |    |   |             |   |
| 1.125%      Senior Convertible Notes, due May 2014 |   | $                | 275,000 |   |             | $      | 275,000 |   |
| Capital      lease obligations                     |   |             | 15,163  |   |             |   | 13,698 |   |
| 6.07%      mortgage note, due October 2014         |   |             | 10,586  |   |             |   | 11,078 |   |
| 6.53%      mortgage note, due November 2012        |   |             | 5,600   |   |             |   | 6,650 |   |
| 7.77%      mortgage note, due December 2011        |   |             | 7,416   |   |             |   | 7,897 |   |
| Other      long-term debt                          |   |             | 485     |   |             |   |  673 |   |
| Total      long-term debt                          |   |             | 314,250 |   |             |   | 314,996 |   |
| Less      current portion                          |   |             | 6,601   |   |             |   |   8,827 |   |
| Long-term      debt                                |   | $                | 307,649 |   |             | $      | 306,169 |   |

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|                                                                                             |   | Thirty-nine      |     |
|--------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                             |   | Weeks      Ended |     |
|                                                                                             |   | November      1, |     |
| (Dollars      in thousands)                                                                      |   | 2008             |     |
|                                                                                             |   |             |     |
| Total      stockholders’ equity, beginning of period                                       |   | $                | 730,444  |   |
| Cumulative      effect of adoption of EITF Issue No. 06-4(1)                                     |   |             | (13,696  | ) |
| Net      loss                                                                                    |   |             | (135,760 | ) |
| Issuance      of common stock (782,719 shares), net of shares withheld for payroll      taxes    |   |             | 484      |   |
| Purchase      of treasury shares (2,004,967 shares)                                              |   |             | (10,969  | ) |
| Stock-based      compensation expense                                                            |   |             | 4,708    |   |
| Tax      benefit related to call options                                                         |   |             | 2,866    |   |
| Write-down      of deferred taxes related to stock-based compensation                            |   |             | (1,352   | ) |
| Unrealized      losses on available-for-sale securities, net of income tax      benefit          |   |             | (24      | ) |
| Total      stockholders’ equity, end of period                                             |   | $                | 576,701  |   |
| ____________________                                                                             |   |             |     |   |
| (1)       See “Note 14. Impact of      Recent Accounting Pronouncements” below. |   |

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|                                                                                                                                                                                                                                                                     |   | Thirteen Weeks Ended |          |   | Thirty-nine      Weeks Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                     |   | November      1,     |          |   | November      3,             |   |   | November      1, |   |   | November      3, |   |
| (In      thousands, except per share amounts)                                                                                                                                                                                                                            |   | 2008                 |          |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                     |   |                 |          |   |                         |   |   |   |   |   |   |   |
| Basic      weighted average common shares outstanding                                                                                                                                                                                                                    |   |                 | 114,877       |   |                         |   | 121,196 |   |   |   | 114,602 |   |   |   | 122,688 |   |
| Dilutive      effect of assumed conversion of                                                                                                                                                                                                                            |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| 4.75% Senior Convertible      Notes(1)                                                                                                                                                                                                                                   |   |                 | 0             |   |                         |   | 0 |   |   |   | 0 |   |   |   | 6,674 |   |
| Dilutive      effect of stock options, stock appreciation                                                                                                                                                                                                                |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| rights, and awards(2)                                                                                                                                                                                                                                               |   |                 | 0             |   |                         |   | 0 |   |   |   | 0 |   |   |   | 1,478 |   |
| Diluted      weighted average common shares and                                                                                                                                                                                                                          |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| equivalents      outstanding                                                                                                                                                                                                                                             |   |                 | 114,877       |   |                         |   | 121,196 |   |   |   | 114,602 |   |   |   | 130,840 |   |
|                                                                                                                                                                                                                                                                     |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Income/(loss)      from continuing operations                                                                                                                                                                                                                            |   | $                    | (57,785       | )      |                         | $      | (1,740 | ) |   | $ | (60,838 | ) |   | $ | 45,620 |   |
| Decrease      in interest expense from assumed                                                                                                                                                                                                                           |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| conversion of 4.75% Senior      Convertible                                                                                                                                                                                                                              |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Notes, net of income tax      benefit(1)                                                                                                                                                                                                                                 |   |                 |   0 |   |                         |   | 0 |   |   |   |     0 |   |   |   | 1,476 |   |
| Income/(loss)      from continuing operations used to                                                                                                                                                                                                                    |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| determine diluted net      income/(loss) per share                                                                                                                                                                                                                       |   |                 | (57,785       | )      |                         |   | (1,740 | ) |   |   | (60,838 | ) |   |   | 47,096 |   |
| Loss      from discontinued operations,                                                                                                                                                                                                                                  |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| net of income tax benefit in      2007                                                                                                                                                                                                                                   |   |                 | (35,181       | )      |                         |   | (1,828 | ) |   |   | (74,922 | ) |   |   | (4,611 | ) |
| Net      income/(loss) used to determine                                                                                                                                                                                                                                 |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| diluted net      income/(loss) per share                                                                                                                                                                                                                            |   | $                    | (92,966       | )      |                         | $      | (3,568 | ) |   | $ | (135,760 | ) |   | $ | 42,485 |   |
|                                                                                                                                                                                                                                                                     |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Options      with weighted average exercise price                                                                                                                                                                                                                        |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| greater      than market price, excluded from                                                                                                                                                                                                                            |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| computation      of net income/(loss) per share:                                                                                                                                                                                                                         |   |                 |          |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Number      of shares                                                                                                                                                                                                                                                    |   | ­(2)            |          |   | ­(2)                    |   |   | ­(2) |   |   |   | 77 |   |
| Weighted      average exercise price per share                                                                                                                                                                                                                           |   | ­(2)            |          |   | ­(2)                    |   |   | ­(2) |   |   | $ | 9.30 |   |
| ____________________                                                                                                                                                                                                                                                     |   |
| (1)  The      4.75% Senior Convertible Notes were converted or redeemed on June 4, 2007      (see “Note 4. Long-term      Debt” above).                                                                                                            |   |
| (2)       Stock options, stock appreciation rights, and awards are excluded from the      computation of diluted net loss per share for the 2008 periods and for the      thirteen weeks ended November 3, 2007 as their effect would have been      anti-dilutive. |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Retail |      |   | Direct-to-  |   |    | Corporate |   |   |         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|-------------|--------|---------|-----------|--------|--------|--------------|--------|
| (In      thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Stores |      |   | Consumer(1) |   |    | and Other |   |   | Consolidated |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |      |   |        |   |    |      |   |   |         |   |
| Thirteen      weeks ended November 1, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |      |   |        |   |    |      |   |   |         |   |
| Net      sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 528,501   |   |        | $      | 21,311  |      |   | $      | 3,254        |   |   | $ | 553,066 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 14,375    |   |        |   | 43      |      |   |   | 8,568        |   |   |   | 22,986 | (3) |
| Loss      before interest and taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | (12,784   | )      |        |   | (9,673  | )         |   |   | (44,425      | )(2)   |   |   | (66,882 | ) |
| Interest      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |      |   |        |   |    |      |   |   | (2,172       | )      |   |   | (2,172 | ) |
| Income      tax benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |      |   |        |   |    |      |   |   | 11,269       |   |   |   | 11,269 |   |
| Loss      from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | (12,784   | )      |        |   | (9,673  | )         |   |   | (35,328      | )      |   |   | (57,785 | ) |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 9,314     |   |        |   | 78      |      |   |   | 1,633        |   |   |   | 11,025 | (3) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Thirty-nine      weeks ended November 1, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Net      sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 1,761,680 |   |        | $      | 70,804  |      |   | $      | 10,544       |   |   | $ | 1,843,028 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 40,596    |   |        |   | 117     |      |   |   | 32,255       |   |   |   | 72,968 | (3) |
| Income/(loss)      before interest and taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 63,320    |   |        |   | (20,202 | )         |   |   | (110,128     | )(2)   |   |   | (67,010 | ) |
| Interest      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |      |   |        |   |    |      |   |   | (6,742       | )      |   |   | (6,742 | ) |
| Income      tax benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |      |   |        |   |    |      |   |   | 12,914       |   |   |   | 12,914 |   |
| Income/(loss)      from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 63,320    |   |        |   | (20,202 | )         |   |   | (103,956     | )      |   |   | (60,838 | ) |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 41,473    |   |        |   | 354     |      |   |   | 7,190        |   |   |   | 49,017 | (3) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Thirteen      weeks ended November 3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Net      sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 588,055   |   |        | $      | 9,255   |      |   | $      | 2,355        |   |   | $ | 599,665 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 15,678    |   |        |   | 137     |      |   |   | 7,158        |   |   |   | 22,973 | (4) |
| Income/(loss)      before interest and taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 32,776    |   |        |   | (1,337  | )         |   |   | (30,686      | )      |   |   | 753 |   |
| Interest      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |      |   |        |   |    |      |   |   | (2,206       | )      |   |   | (2,206 | ) |
| Income      tax provision                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |      |   |        |   |    |      |   |   | (287         | )      |   |   | (287 | ) |
| Income/(loss)      from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 32,776    |   |        |   | (1,337  | )         |   |   | (33,179      | )      |   |   | (1,740 | ) |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 27,672    |   |        |   | 624     |      |   |   | 5,603        |   |   |   | 33,899 | (4) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Thirty-nine      weeks ended November 3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |      |   |        |   |    |      |   |   |         |   |   |   |   |   |
| Net      sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 1,958,827 |   |        | $      | 24,656  |      |   | $      | 7,155        |   |   | $ | 1,990,638 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 42,459    |   |        |   | 253     |      |   |   | 26,065       |   |   |   | 68,777 | (4) |
| Income/(loss)      before interest and taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 175,456   |   |        |   | (4,504  | )         |   |   | (88,833      | )      |   |   | 82,119 |   |
| Interest      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |      |   |        |   |    |      |   |   | (8,287       | )      |   |   | (8,287 | ) |
| Income      tax provision                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |      |   |        |   |    |      |   |   | (28,212      | )      |   |   | (28,212 | ) |
| Income/(loss)      from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 175,456   |   |        |   | (4,504  | )         |   |   | (125,332     | )      |   |   | 45,620 |   |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 83,264    |   |        |   | 751     |      |   |   | 23,217       |   |   |   | 107,232 | (4) |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (1)  Current-year      periods include LANE BRYANT WOMAN catalog.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (2)       Includes restructuring charges of $1,585 for the thirteen weeks ended      November 1, 2008 and $10,812 for the thirty-nine weeks ended November 1,      2008, severance and restructure costs of $1,971 for the thirteen and      thirty-nine weeks ended November 1, 2008, and severance, restructure, and      store impairment costs of $22,345 for the thirteen weeks ended November 1,      2008 and $31,674 for the thirty-nine weeks ended November 1, 2008 (see      “Note      12. Restructuring and Other Charges” below). |   |
| (3)       Excludes $222 of depreciation and amortization and $14 of capital      expenditures for the thirteen weeks ended November 1, 2008, and $806 of      depreciation and amortization and $481 of capital expenditures for the      thirty-nine weeks ended November 1, 2008, related to our discontinued      operations.                                                                                                                                                                                                                                 |   |
| (4)       Excludes $264 of depreciation and amortization and $860 of capital      expenditures for the thirteen weeks ended November 3, 2007, and $715 of      depreciation and amortization and $1,543 of capital expenditures for the      thirty-nine weeks ended November 3, 2007, related to our discontinued      operations.                                                                                                                                                                                                                              |   |

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|                                                                                                                                                                                                                                                                                                                           |   | Costs            |   |   | Costs      Incurred  |   |   | Estimated  |   |   | Total            |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|----------------------|--------|--------|------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                           |   | Incurred         |   |   | for      Thirty-nine |   |   | Remaining  |   |   | Estimated        |   |
|                                                                                                                                                                                                                                                                                                                           |   | as      of       |   |   | Weeks      Ended     |   |   | Costs      |   |   | Costs      as of |   |
|                                                                                                                                                                                                                                                                                                                           |   | February      2, |   |   | November      1,     |   |   | to      be |   |   | November      1, |   |
| (In      thousands)                                                                                                                                                                                                                                                                                                            |   | 2008             |   |   | 2008                 |   |   | Incurred   |   |   | 2008             |   |
|                                                                                                                                                                                                                                                                                                                           |   |             |   |   |                 |   |   |       |   |   |             |   |
| Severance,      retention, and related costs                                                                                                                                                                                                                                                                                   |   | $                | 2,792  |   |                 | $      | 12,988 |       |   | $      | 201              |   |   | $ | 15,981 |   |
| Store      lease termination costs                                                                                                                                                                                                                                                                                             |   |             | 0      |   |                 |   | 7,151  |       |   |   | 1,756            |   |   |   | 8,907 |   |
| Asset      write-downs and accelerated                                                                                                                                                                                                                                                                                         |   |             |   |   |                 |   |   |       |   |   |             |   |   |   |   |   |
| depreciation                                                    |   |             | 11,325 |   |                 |   | 3,240  |       |   |   | 29               |   |   |   | 14,594 |   |
| Relocation      and other closing costs                                                                                                                                                                                                                                                                                        |   |             | 241    |   |                 |   | 862    |       |   |   | 207              |   |   |   | 1,310 |   |
| Total                                                                                                                                                                                                                                                                                                                          |   | $                | 14,358 |   |                 | $      | 24,241 |       |   | $      | 2,193            |   |   | $ | 40,792 |   |

|                                                                                                                      |   |             |   |   | Costs      Accrued   |   |   |        |   |   |             |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|----------------------|--------|--------|-------------|--------|--------|------------------|--------|
|                                                                                                                      |   | Accrued          |   |   | for      Thirty-nine |   |   |        |   |   | Accrued          |   |
|                                                                                                                      |   | as      of       |   |   | Weeks      Ended     |   |   |        |   |   | as      of       |   |
|                                                                                                                      |   | February      2, |   |   | November      1,     |   |   | Payments/   |   |   | November      1, |   |
| (In      thousands)                                                                                                       |   | 2008(1)          |   |   | 2008                 |   |   | Settlements |   |   | 2008(1)          |   |
|                                                                                                                      |   |             |   |   |                 |   |   |        |   |   |             |   |
| Severance,      retention, and related costs                                                                              |   | $                | 2,688  |   |                 | $      | 12,988 |        |   | $      | (7,223           | )      |   | $ | 8,453 |   |
| ____________________                                                                                                      |   |
| (1)       Included in “Accrued expenses” in the accompanying condensed consolidated      balance sheets. |   |

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|                                                                                                                                                                                                                                        |   | Balance          |    |   |                   |   |   |       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                        |   | November      1, |    |   | Fair Value Method Used |   |
| (In      thousands)                                                                                                                                                                                                                         |   | 2008             |    |   | Level 2                |   |   | Level 3(1) |   |
|                                                                                                                                                                                                                                        |   |             |    |   |                   |   |   |       |   |
| Assets                                                                                                                                                                                                                                      |   |             |    |   |                   |   |   |       |   |
| Available-for-sale      securities(2)                                                                                                                                                                                                       |   | $                | 6,375   |   |                   | $      | 6,375  |       |   |   |   |
| Certificates      and retained interests in securitized receivables                                                                                                                                                                         |   |             | 112,801 |   |                   |   |   |       |   | $ | 112,801 |   |
|                                                                                                                                                                                                                                        |   |             |    |   |                   |   |   |       |   |   |   |   |
| Liabilities                                                                                                                                                                                                                                 |   |             |    |   |                   |   |   |       |   |   |   |   |
| Servicing      liability                                                                                                                                                                                                                    |   |             | 3,367   |   |                   |   |   |       |   |   | 3,367 |   |
| ____________________                                                                                                                                                                                                                        |   |
| (1)       Fair value is estimated based on internally-developed models or      methodologies utilizing significant inputs that are unobservable from      objective sources.                                                           |   |
| (2)       Unrealized gains and losses on our available-for-sale securities are      included in stockholders’ equity until realized and realized gains and      losses are recognized in income when the securities are    sold. |   |

|                                                                                |   | Retained  |    |   | Servicing |   |
|-------------------------------------------------------------------------------------|--------|-----------|---------|--------|-----------|--------|
| (In      thousands)                                                                 |   | Interests |    |   | Liability |   |
|                                                                                |   |      |    |   |      |   |
| Balance,      February 2, 2008                                                      |   | $         | 115,912 |   |      | $      | 3,038 |   |
| Additions      to I/O strip and servicing liability                                 |   |      | 29,617  |   |      |   | 4,283 |   |
| Net      reductions to other retained interests                                     |   |      | (2,424  | )      |      |   |   |   |
| Reductions      and maturities of QSPE certificates                                 |   |      | (485    | )      |      |   |   |   |
| Amortization      and valuation adjustments to I/O strip and servicing    liability |   |      | (29,819 | )      |      |   | (3,954 | ) |
| Balance,      November 1, 2008                                                      |   | $         | 112,801 |   |      | $      | 3,367 |   |

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|   | · | Measurement      of additional assets acquired and liabilities assumed at fair value as of      the acquisition date; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Re-measurement      of liabilities related to contingent consideration at fair value in      periods subsequent to acquisition; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Expensing      in pre-acquisition periods of acquisition-related costs incurred by the      acquirer; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Initial      measurement of non-controlling interests in subsidiaries at fair value and      classification of the interest as a separate component of      equity. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

FORWARD-LOOKING STATEMENTS

| · | Our      business is dependent upon our ability to accurately predict rapidly      changing fashion trends, customer preferences, and other fashion-related      factors, which we may not be able to successfully accomplish in the      future. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our      business plan is largely dependent upon continued growth in the plus-size      women’s apparel market, which may notoccur. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

| · | A      continuing slowdown or recession in the United States economy, an      uncertain economic outlook, and escalating energy and food costs could      lead to reduced consumer demand for our products in the future, which      could adversely affect ourbusiness. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The      women’s specialty retail apparel and direct-to-consumer markets are highly      competitive and we may be unable to compete successfully against existing      or future competitors. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We      cannot assure the successful sale of our FIGI’S  catalog. |
|--------|-------------------------------------------------------------------------|

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| ·   | We      cannot assure the successful implementation of our business plan for      increased profitability and growth in our Retail Stores or      Direct-to-Consumer segments.  We cannot assure the successful      implementation of our plans for the transformation of our brands to a      vertical specialty store model.  Recent changes in management      may result in a failure to achieve improvement in our operating      results. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We      cannot assure the successful implementation of our planned cost reduction      and capital budget reduction plans; the effective implementation of our      plans for consolidation of our CATHERINES brand, a new organizational      structure, and enhancements in our merchandise and marketing; and we      cannot assure the realization of our anticipated annualized expense      savings from restructuring programs announced in February 2008 and      November 2008. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our      success and our ability to execute our business strategy depend largely on      the efforts and abilities of our executive officers and their management      teams.  We also must motivate employees to remain focused on our      strategies and goals, particularly during a period of changing leadership      for the Company and a number of our operating divisions.  The      inability to find a suitable permanent replacement for our former Chief      Executive Officer within a reasonable time period, as well as management      personnel to replace departing executives, could have a material adverse      effect on our business.  We do not maintain key-person life insurance      policies with respect to any of ouremployees. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We      depend on our distribution and fulfillment centers and third-party freight      consolidators and service providers, and could incur significantly higher      costs and longer lead times associated with distributing our products to      our stores and shipping our products to our e-commerce and catalog      customers if operations at any one of these locations 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.  In addition, the current      global financial crisis could adversely affect our ability to secure      adequate credit financing. If we were unable to obtain sufficient      financing at an affordable cost, our ability to merchandise our stores,      e-commerce, or catalog businesses could be adversely    affected. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      plan to refinance our maturing credit card securitization series with our      credit conduit facilities, which are renewed annually.  To the      extent that these conduit facilities are not renewed they would begin to      amortize and we would finance this amortization using our committed      revolving credit facilities to the extent available.  There is      no assurance that we can refinance or renew our conduit facilities on      terms comparable to our existing facilities or that there would be      sufficient availability under our revolving credit facilities for such      financing.  Without adequate liquidity, our ability to offer our      credit program to our customers and consequently our financial condition      and results of operations, would be adversely  affected. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| · | 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. |
|--------|--------------------------------------------------------------------------------------------------|

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| ·   | 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.  In addition, we are subject to the      Fair Labor Standards Act and various state and Federal laws and      regulations governing such matters as minimum wages, exempt status      classification, overtime, and employee benefits.  Changes in      Federal or state laws or regulations regarding minimum wages or other      employee benefits could cause us to incur additional wage and benefit      costs, which could adversely affect our results of    operations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Inadequate      systems capacity, a disruption or slowdown in telecommunications services,      changes in technology, changes in government regulations, systems issues,      security breaches, a failure to integrate order management systems, or      customer privacy issues could result in reduced sales or increases in      operating expenses as a result of our efforts or our inability to remedy      such issues. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| · | The      holders of our 1.125% Senior Convertible Notes due May 1, 2014 (the      “1.125% Notes”) could require us to repurchase the principal amount of the      notes for cash before maturity of the notes upon the occurrence of a      “fundamental change” as defined in the prospectus filed in connection with      the 1.125% Notes.  Such a repurchase would require significant      amounts of cash, would be subject to important limitations, and could      adversely affect our financialcondition. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      make certain significant assumptions, estimates, and projections related      to the useful lives of our property, plant, and equipment and the      valuation of goodwill and other intangible assets related to      acquisitions.  The carrying amount and/or useful life of these      assets are subject to periodic and/or annual valuation tests for      impairment.  Impairment results when the carrying value of an      asset exceeds the undiscounted (or for goodwill and indefinite-lived      intangible assets the discounted) future cash flows associated with the      asset.  If actual experience were to differ materially from the      assumptions, estimates, and projections used to determine useful lives or      the valuation of property, plant, equipment, or intangible assets, a      write-down for impairment of the carrying value of the assets, or      acceleration of depreciation or amortization of the assets, could      result.  Such a write-down or acceleration of depreciation or      amortization could have an adverse impact on our reported results of      operations. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Pursuant      to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to      include our assessment of the effectiveness of our internal control over      financial reporting in our annual reports.  Our independent      registered public accounting firm is also required to report on whether or      not they believe that we maintained, in all material respects, effective      internal control over financial reporting.  If we are unable to      maintain effective internal control over financial reporting we could be      subject to regulatory sanctions and a possible loss of public confidence      in the reliability of our financial reporting.  Such a failure      could result in our inability to provide timely and/or reliable financial      information and could adversely affect our  business. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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CRITICAL ACCOUNTING POLICIES

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RECENT DEVELOPMENTS

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| ·   | Jay      H. Levitt, the former President and CEO of May Merchandising and May      Department Stores International, was appointed President of      our FASHION BUG brand.  Mr. Levitt has served in various      retail-industry leadership and merchandising positions over the past three      decades.  From 2001 through 2005 he was the President and Chief      Executive Officer of May Merchandising and May Department Stores      International, based in St. Louis.  Previously, he had held the      position of President and Chief Executive Officer of Robinsons May,      following his responsibilities as the General Merchandise Manager for a      number of May divisions over several years.  Before joining May, he      was a divisional merchandise manager at J.W. Robinsons and The      Broadway. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Carol      L.Williams was appointed President of our CATHERINES PLUS SIZES      brand.  Ms. Williams has served in various retail-industry      executive and merchandising positions over the past three decades.       Most recently, she served as the President of May Department Stores      International from 2002 through 2006.  She was also the      President and Chief Executive Officer of Jacobson Stores, Inc., following      executive leadership and merchandising positions at Saks, Inc., Edison      Brothers, Inc., and Limited Stores. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Jeffrey A.      Elliott was appointed President of our Charming Outlets division, which      includes our LANE BRYANT OUTLET and PETITE SOPHISTICATE OUTLET      chains.  Since 2006 Mr. Elliott has served as Senior Vice      President and General Merchandise Manager of Charming Outlets.       Previously, he served as Vice President and General Merchandise Manager of      Casual Sportswear for our LANE BRYANT brand and as a buyer      for our FASHION BUG brand.  Mr. Elliott’s retail apparel      merchandising experience spans more than 25 years, including positions      with The May Company, Sears, Carson Pirie Scott, and Montgomery      Ward. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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OVERVIEW

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RESULTS OF OPERATIONS

|                                                |   |                    |   |   | Percentage       |   |    |                            |   |   | Percentage       |   |
|-----------------------------------------------------|--------|-------------------------|--------|--------|------------------|--------|---------|---------------------------------|--------|--------|------------------|--------|
|                                                |   | Thirteen Weeks Ended(1) |   |   | Change           |   |    | Thirty-nine      Weeks Ended(1) |   |   | Change           |   |
|                                                |   | November      1,        |   |   | November      3, |   |    | From      Prior                 |   |   | November      1, |   |   | November      3, |   |   | From      Prior |   |
|                                                |   | 2008                    |   |   | 2007             |   |    | Period                          |   |   | 2008             |   |   | 2007 |   |   | Period |   |
|                                                |   |                    |   |   |             |   |    |                            |   |   |             |   |   |   |   |   |   |   |
| Net      sales                                      |   |                    | 100.0  | %      |             |   | 100.0   | %                               |   |   | (7.8             | )%     |   |   | 100.0 | % |   |   | 100.0 | % |   |   | (7.4 | )% |
| Cost      of goods sold, buying,                    |   |                    |   |   |             |   |    |                            |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| catalog, and occupancy      expenses           |   |                    | 77.4   |   |             |   | 71.6    |                            |   |   | (0.2             | )      |   |   | 73.2 |   |   |   | 69.7 |   |   |   | (2.8 | ) |
| Selling,      general, and                          |   |                    |   |   |             |   |    |                            |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| administrative      expenses                        |   |                    | 30.3   |   |             |   | 28.8    |                            |   |   | (2.8             | )      |   |   | 28.2 |   |   |   | 26.6 |   |   |   | (1.8 | ) |
| Impairment      of store assets                     |   |                    | 3.7    |   |             |   | – |                            |   |   | –          |   |   |   | 1.1 |   |   |   | – |   |   |   | – |   |
| Restructuring      and other charges                |   |                    | 1.0    |   |             |   | – |                            |   |   | –          |   |   |   | 1.3 |   |   |   | 0.0 |   |   |   | – |   |
| Income/(loss)      from operations                  |   |                    | (12.4  | )      |             |   | (0.3    | )                               |   |   | **               |   |   |   | (3.8 | ) |   |   | 3.7 |   |   |   | ** |   |
| Other      income                                   |   |                    | 0.3    |   |             |   | 0.4     |                            |   |   | (30.2            | )      |   |   | 0.2 |   |   |   | 0.4 |   |   |   | (59.1 | ) |
| Interest      expense                               |   |                    | 0.4    |   |             |   | 0.4     |                            |   |   | (1.5             | )      |   |   | 0.4 |   |   |   | 0.4 |   |   |   | (18.6 | ) |
| Income      tax (benefit)/provision                 |   |                    | (2.0   | )      |             |   | 0.0     |                            |   |   | **               |   |   |   | (0.7 | ) |   |   | 1.4 |   |   |   | ** |   |
| Income/(loss)      from                             |   |                    |   |   |             |   |    |                            |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| continuing    operations                            |   |                    | (10.4  | )      |             |   | (0.3    | )                               |   |   | **               |   |   |   | (3.3 | ) |   |   | 2.3 |   |   |   | ** |   |
| Loss      from discontinued operations,             |   |                    |   |   |             |   |    |                            |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net of tax                                          |   |                    | (6.4   | )      |             |   | (0.3    | )                               |   |   | **               |   |   |   | (4.1 | ) |   |   | (0.2 | ) |   |   | ** |   |
| Net      income/(loss)                              |   |                    | (16.8  | )      |             |   | (0.6    | )                               |   |   | **               |   |   |   | (7.4 | ) |   |   | 2.1 |   |   |   | ** |   |
| ____________________                                |   |
| (1)       Results may not add due to rounding. |   |
| **       Not meaningful.                       |   |

|                                                                                                                                                                                                                  |   | Thirteen Weeks Ended |      |   | Thirty-nine      Weeks Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------------|--------|
|                                                                                                                                                                                                                  |   | November      1,     |      |   | November      3,             |   |   | November      1, |   |   | November      3, |   |
| (In      millions)                                                                                                                                                                                                    |   | 2008                 |      |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                                  |   |                 |      |   |                         |   |   |   |   |   |   |   |
| Net      sales                                                                                                                                                                                                        |   |                 |      |   |                         |   |   |   |   |   |   |   |
| FASHION      BUG                                                                                                                                                                                                      |   | $                    | 191.1     |   |                         | $      | 221.4 |   |   | $ | 660.0 |   |   | $ | 758.3 |   |
| LANE      BRYANT(1)                                                                                                                                                                                                   |   |                 | 257.2     |   |                         |   | 279.6 |   |   |   | 838.9 |   |   |   | 909.0 |   |
| CATHERINES                                                                                                                                                                                                            |   |                 | 74.2      |   |                         |   | 82.0 |   |   |   | 244.0 |   |   |   | 276.3 |   |
| Other      retail stores(2)                                                                                                                                                                                           |   |                 | 6.0       |   |                         |   | 5.1 |   |   |   |   18.8 |   |   |   |   15.2 |   |
| Total      Retail Stores segment                                                                                                                                                                                      |   |                 | 528.5     |   |                         |   | 588.1 |   |   |   | 1,761.7 |   |   |   | 1,958.8 |   |
| Total      Direct-to-Consumer segment                                                                                                                                                                                 |   |                 | 21.3      |   |                         |   | 9.3 |   |   |   | 70.8 |   |   |   | 24.7 |   |
| Corporate      and other(3)                                                                                                                                                                                           |   |                 |  3.3 |   |                         |   | 2.3 |   |   |   |  10.5 |   |   |   |   7.1 |   |
| Total      net sales                                                                                                                                                                                                  |   | $                    | 553.1     |   |                         | $      | 599.7 |   |   | $ | 1,843.0 |   |   | $ | 1,990.6 |   |
| ____________________                                                                                                                                                                                                  |   |
| (1)       Includes LANE BRYANT OUTLET stores.                                                                                                                                                                    |   |
| (2)       Includes PETITE SOPHISTICATE stores, which began operations in October      2007 and were closed in August 2008, and PETITE SOPHISTICATE OUTLET      stores, which began operations in September 2006. |   |
| (3)       Primarily revenue related to loyalty card fees.                                                                                                                                                        |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Thirteen Weeks Ended |   |   | Thirty-nine      Weeks Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | November      1,     |   |   | November      3,             |   |   | November      1, |   |   | November      3, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2008                 |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Retail      Stores segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Increase      (decrease) in comparable store sales(1)      :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Consolidated      retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                 | (9     | )%     |                         |   | (8 | )% |   |   | (11 | )% |   |   | (4 | )% |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 | (9     | )      |                         |   | (7 | ) |   |   | (10 | ) |   |   | (3 | ) |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | (10    | )      |                         |   | (9 | ) |   |   | (11 | ) |   |   | (5 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (10    | )      |                         |   | (6 | ) |   |   | (13 | ) |   |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Sales      from new stores as a percentage of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated prior-period      sales(2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 | 1      |   |                         |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | 4      |   |                         |   | 4 |   |   |   | 4 |   |   |   | 6 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | 0      |   |                         |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Other      retail stores(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                 | 0      |   |                         |   | 1 |   |   |   | 0 |   |   |   | 1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Prior-period      sales from closed stores as a percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| of total consolidated      prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| FASHION      BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 | (3     | )      |                         |   | (1 | ) |   |   | (2 | ) |   |   | (1 | ) |
| LANE      BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | (3     | )      |                         |   | (1 | ) |   |   | (3 | ) |   |   | (1 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (0     | )      |                         |   | (0 | ) |   |   | (0 | ) |   |   | (0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Increase/(decrease)      in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 | (10    | )      |                         |   | (4 | ) |   |   | (10 | ) |   |   | 2 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Direct-to-Consumer      segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Increase      in Direct-to-Consumer segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                 | 129    | (5)    |                         |   | 27 |   |   |   | 187 | (5) |   |   | 19 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Increase/(decrease)      in consolidated total net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                 | (8     | )      |                         |   | (14 | ) |   |   | (7 | ) |   |   | (9 | ) |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| (1)       “Comparable store sales” is not a measure that has been defined under      generally accepted accounting principles. The method of calculating      comparable store sales varies across the retail industry and, therefore,      our calculation of comparable store sales is not necessarily comparable to      similarly-titled measures reported by other companies. We define      comparable store sales as sales from stores operating in both the current      and prior-year periods. New stores are added to the comparable store      sales base 13 months after their open date. Sales from stores that      are relocated within the same mall or strip-center, remodeled, or have a      legal square footage change of less than 20% are included in the      calculation of comparable store sales. Sales from stores that are      relocated outside the existing mall or strip-center, or have a legal      square footage change of 20% or more, are excluded from the calculation of      comparable store sales until 13 months after the relocated store is      opened. Stores that are temporarily closed for a period of 4 weeks or      more are excluded from the calculation of comparable store sales for the      applicable periods in the year of closure and the subsequent      year. Non-store sales, such as catalog and internet sales, are      excluded from the calculation of comparable store sales. |   |
| (2)       Includes incremental Retail Stores segment e-commerce    sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| (3)       Includes LANE BRYANT OUTLET stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (4)       Includes PETITE SOPHISTICATE stores, which were closed in August      2008, and PETITE SOPHISTICATE OUTLET stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| (5)       Primarily due to LANE BRYANT WOMAN catalog which began operations in the      Fiscal 2008 Fourth Quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |

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|                                                                                                                                                                                                                  |   | Thirteen Weeks Ended |   |   | Thirty-nine      Weeks Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------------|--------|
|                                                                                                                                                                                                                  |   | November      1,     |   |   | November      3,             |   |   | November      1, |   |   | November      3, |   |
| (In      millions)                                                                                                                                                                                                    |   | 2008                 |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                                  |   |                 |   |   |                         |   |   |   |   |   |   |   |
| Income/(loss)      from operations                                                                                                                                                                                    |   |                 |   |   |                         |   |   |   |   |   |   |   |
| FASHION      BUG                                                                                                                                                                                                      |   | $                    | (27.7  | )      |                         | $      | (0.9 | ) |   | $ | (2.3 | ) |   | $ | 49.8 |   |
| LANE      BRYANT(1)                                                                                                                                                                                                   |   |                 | 16.7   |   |                         |   | 27.5 |   |   |   | 55.0 |   |   |   | 93.1 |   |
| CATHERINES                                                                                                                                                                                                            |   |                 | (2.3   | )      |                         |   | 6.7 |   |   |   | 10.3 |   |   |   | 33.2 |   |
| Other      retail stores(2)                                                                                                                                                                                           |   |                 | 0.5    |   |                         |   | (0.5 | ) |   |   |         0.3 |   |   |   | (0.7 | ) |
| Total      Retail Stores segment                                                                                                                                                                                      |   |                 | (12.8  | )      |                         |   | 32.8 |   |   |   | 63.3 |   |   |   | 175.4 |   |
| Total      Direct-to-Consumer segment                                                                                                                                                                                 |   |                 | (9.7   | )      |                         |   | (1.3 | ) |   |   | (20.2 | ) |   |   | (4.5 | ) |
| Corporate      and other                                                                                                                                                                                              |   |                 | (46.3  | )      |                         |   | (33.4 | ) |   |   | (113.3 | ) |   |   |        (96.6 | ) |
| Total      income/(loss) from operations                                                                                                                                                                              |   | $                    | (68.8  | )      |                         | $      | (1.9 | ) |   | $ | (70.2 | ) |   | $ | 74.3 |   |
| ____________________                                                                                                                                                                                                  |   |
| (1)        Includes LANE BRYANT OUTLET stores.                                                                                                                                                              |   |
| (2)       Includes PETITE SOPHISTICATE stores, which began operations in October      2007 and were closed in August 2008, and PETITE SOPHISTICATE OUTLET      stores, which began operations in September 2006. |   |

|                                                                                                                                                                                                                    |   | FASHION |   |   | LANE   |   |   |       |   |   |     |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|--------|--------|------------|--------|--------|----------|--------|--------|--------|--------|
|                                                                                                                                                                                                                    |   | BUG     |   |   | BRYANT |   |   | CATHERINES |   |   | Other(1) |   |   | Total  |   |
|                                                                                                                                                                                                                    |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |
| Fiscal      2009 Year-to-Date:                                                                                                                                                                                          |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |
| Stores      at February 2, 2008                                                                                                                                                                                         |   |    | 989    |   |   |   | 896    |       |   |   | 468      |   |   |   | 56     |   |   |   | 2,409 |   |
|                                                                                                                                                                                                                    |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |
| Stores      opened                                                                                                                                                                                                      |   |    | 5      |   |   |   | 33     | (2)        |   |   | 7        |   |   |   | 4      |   |   |   | 49 |   |
| Stores      closed(3)                                                                                                                                                                                                   |   |    | (83    | )      |   |   | (16    | )          |   |   | (11      | )      |   |   | (4     | ) |   |   | (114 | ) |
| Net      change in stores                                                                                                                                                                                               |   |    | (78    | )      |   |   | 17     |       |   |   | (4       | )      |   |   | 0      |   |   |   | (65 | ) |
|                                                                                                                                                                                                                    |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |
| Stores      at November 1, 2008                                                                                                                                                                                         |   |    | 911    |   |   |   | 913    |       |   |   | 464      |   |   |   | 56     |   |   |   | 2,344 |   |
|                                                                                                                                                                                                                    |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |
| Stores      relocated during period                                                                                                                                                                                     |   |    | 10     |   |   |   | 32     |       |   |   | 6        |   |   |   | 0      |   |   |   | 48 |   |
|                                                                                                                                                                                                                    |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |
| Fiscal      2009:                                                                                                                                                                                                       |   |    |   |   |   |   |   |       |   |   |     |   |   |   |   |   |   |   |   |   |
| Planned      store openings                                                                                                                                                                                             |   |    | 5      |   |   |   | 33-35  | (4)        |   |   | 7        |   |   |   | 4      | (5) |   |   | 49-51 |   |
| Planned      store closings(6)                                                                                                                                                                                          |   |    | 96-99  |   |   |   | 35-40  |       |   |   | 12       |   |   |   | 5      | (7) |   |   | 148-156 |   |
| Planned      store relocations                                                                                                                                                                                          |   |    | 10     |   |   |   | 36-39  | (8)        |   |   | 6        |   |   |   | 0      |   |   |   | 52-55 |   |
| ____________________                                                                                                                                                                                                    |   |
| (1)       Includes PETITE SOPHISTICATE and PETITE SOPHISTICATE OUTLET      stores.                                                                                                                                 |   |
| (2)       Includes 6 LANE BRYANT OUTLET stores.                                                                                                                                                                    |   |
| (3)       Includes 72 FASHION BUG, 10 CATHERINES, 12 LANE BRYANT, 2 LANE BRYANT      OUTLET, and 4 PETITE SOPHISTICATE stores closed as part of the      streamlining initiatives announced in February 2008. |   |
| (4)       Includes 13 LANE BRYANT intimate apparel side-by-side stores and 7 LANE      BRYANT OUTLET stores.                                                                                                       |   |
| (5)       PETITE SOPHISTICATE OUTLET stores.                                                                                                                                                                       |   |
| (6)       Includes approximately 150 under-performing stores to be closed as part of      the streamlining initiatives announced in February 2008.                                                                 |   |
| (7)       PETITE SOPHISTICATE and PETITE SOPHISTICATE OUTLET stores.                                                                                                                                               |   |
| (8)       Includes approximately 13-16 conversions to LANE BRYANT intimate apparel      side-by-side stores.                                                                                                       |   |

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LIQUIDITY AND CAPITAL RESOURCES

|                                |   | November      1, |   |   | February      2, |   |
|-------------------------------------|--------|------------------|--------|--------|------------------|--------|
| (Dollars      in millions)          |   | 2008             |   |   | 2008             |   |
|                                |   |             |   |   |             |   |
| Cash      and cash equivalents      |   | $                | 67.8   |   |             | $      | 61.3 |   |
| Available-for-sale      securities  |   | $                | 6.4    |   |             | $      | 13.4 |   |
| Working      capital                |   | $                | 414.1  |   |             | $      | 495.3 |   |
| Current      ratio                  |   |             | 2.1    |   |             |   | 2.4 |   |
| Long-term      debt to equity ratio |   |             | 53.3   | %      |             |   | 41.9 | % |

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| (Dollars      in millions)                                                                                                                                                                                                                                                                                                                                                                                                                               | Series 1999-2          | Series 2004-VFC        | Series 2004-1       | 2005-RPA(1)         | Series 2007-1       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|------------------------|---------------------|---------------------|---------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                   |                   |                |                |                |
| Date      of facility                                                                                                                                                                                                                                                                                                                                                                                                                                    | May      1999          | January      2004      | August      2004    | May      2005       | October      2007   |
| Type      of facility                                                                                                                                                                                                                                                                                                                                                                                                                                    | Conduit                | Conduit                | Term                | Conduit             | Term                |
| Maximum      funding                                                                                                                                                                                                                                                                                                                                                                                                                                     | $50.0                  |        $50.0(2)   | $180.0              | $55.0               | $320.0              |
| Funding      as of November 1, 2008                                                                                                                                                                                                                                                                                                                                                                                                                      | $38.0                  | $0.0                   | $180.0              | $39.0               | $320.0              |
| First      scheduled principal payment                                                                                                                                                                                                                                                                                                                                                                                                                   | Not      applicable    | Not      applicable    | April      2009     | Not      applicable | April      2012     |
| Expected      final principal payment                                                                                                                                                                                                                                                                                                                                                                                                                    | Not      applicable(3) | Not      applicable(3) | March      2010     | Not      applicable | March      2013     |
| Next      renewal date                                                                                                                                                                                                                                                                                                                                                                                                                                   | March      2009        | January      2009      | Not      applicable | May      2009       | Not      applicable |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (1)       Receivables Purchase Agreement (for the Crosstown Traders catalog credit      card receivables program).  The sale of the misses apparel      catalog credit card receivables related to Crosstown Traders catalog      titles was completed on November 14, 2008 (see “RECENT DEVELOPMENTS”      above).  At the close of the sale the 2005-RPA was repaid in      full and the facility was terminated. |
| (2)       On November 14, 2008 the maximum funding capacity of Series 2004-VFC was      increased to $105.0 million.                                                                                                                                                                                                                                                                                                                                |
| (3)       Series 1999-2 and Series 2004-VFC have scheduled final payment dates that      occur in the twelfth month following the month in which the series begins      amortizing.  These series begin amortizing on the next renewal      date subject to the further extension of the renewal date as a result of      renewal of the purchase commitment.                                                                             |

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|                                                                                                               |   | Thirteen Weeks Ended |      |   | Thirty-nine Weeks Ended |   |
|--------------------------------------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|-------------------------|--------|
|                                                                                                               |   | November      1,     |      |   | November      3,        |   |   | November      1, |   |   | November      3, |   |
| (In      millions)                                                                                                 |   | 2008                 |      |   | 2007                    |   |   | 2008 |   |   | 2007 |   |
|                                                                                                               |   |                 |      |   |                    |   |   |   |   |   |   |   |
| Net      securitization excess spread revenues                                                                     |   | $                    | 25.6      |   |                    | $      | 17.0 |   |   | $ | 75.2 |   |   | $ | 51.1 |   |
| Net      additions to the I/O strip and                                                                            |   |                 |      |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| servicing    liability                                                                                             |   |                 | (0.6      | )      |                    |   | 6.3 |   |   |   | (0.6 | ) |   |   | 7.5 |   |
| Other      credit card revenues, net(1)                                                                            |   |                 |  3.9 |   |                    |   | 3.2 |   |   |   |  9.8 |   |   |   | 8.6 |   |
| Total      credit card revenues                                                                                    |   |                 | 28.9      |   |                    |   | 26.5 |   |   |   | 84.4 |   |   |   | 67.2 |   |
| Less      total credit card program expenses                                                                       |   |                 | 17.4      |   |                    |   | 14.1 |   |   |   | 52.4 |   |   |   | 37.9 |   |
| Total      credit contribution                                                                                     |   | $                    | 11.5      |   |                    | $      | 12.4 |   |   | $ | 32.0 |   |   | $ | 29.3 |   |
| ____________________                                                                                               |   |
| (1)       Excludes inter-company merchant fees between our credit entities and      our retail entities. |   |

|                                         |   | Thirteen Weeks Ended |   |   | Thirty-nine Weeks Ended |   |
|----------------------------------------------|--------|----------------------|--------|--------|-------------------------|--------|
|                                         |   | November      1,     |   |   | November      3,        |   |   | November      1, |   |   | November      3, |   |
| (In      millions)                           |   | 2008                 |   |   | 2007                    |   |   | 2008 |   |   | 2007 |   |
|                                         |   |                 |   |   |                    |   |   |   |   |   |   |   |
| Average      managed receivables outstanding |   | $                    | 583.7  |   |                    | $      | 369.4 |   |   | $ | 587.0 |   |   | $ | 365.9 |   |
| Ending      managed receivables outstanding  |   | $                    | 588.5  |   |                    | $      | 598.1 |   |   | $ | 588.5 |   |   | $ | 598.1 |   |

FINANCING

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MARKET RISK

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IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

Item 3. Quantitative and Qualitative Disclosures About MarketRisk

Item 4. Controls and Procedures

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

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Item 2. Unregistered Sales of Equity Securities and Use ofProceeds

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Total                 |   |   | Maximum          |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Number                |   |   | Number      of   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | of      Shares        |   |   | Shares      that |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   | Purchased      as     |   |   | May      Yet be  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Total          |   |   |            |   |   | Part      of Publicly |   |   | Purchased        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Number         |   |   | Average         |   |   | Announced             |   |   | Under      the   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | of      Shares |   |   | Price      Paid |   |   | Plans      or         |   |   | Plans      or    |   |
| Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Purchased      |   |   | per Share       |   |   | Programs(2)           |   |   | Programs(2)      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           |   |   |            |   |   |                  |   |   |             |   |
| August      3, 2008 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |           |   |   |            |   |   |                  |   |   |             |   |
| August      30, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           | 1,657  | (1)    |            | $      | 5.53   |                  |   |   | –          |   |   |   |   |
| August      31, 2008 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |           |   |   |            |   |   |                  |   |   |             |   |   |   |   |
| October      4, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |           | 12,185 | (1)    |            |   | 4.67   |                  |   |   | –          |   |   |   |   |
| October      5, 2008 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |           |   |   |            |   |   |                  |   |   |             |   |   |   |   |
| November      1, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           | 4,175  | (1)    |            |   | 3.75   |                  |   |   | –          |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           | 18,017 |   |            | $      | 4.54   |                  |   |   | –          |   |   |   |   | (2) |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| (1)       Shares withheld for the payment of payroll taxes on employee stock awards      that vested during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| (2)       On November 8, 2007 we publicly announced that our Board of Directors      granted authority to repurchase shares of our common stock up to an      aggregate value of $200 million. Shares may be purchased in the open      market or through privately-negotiated transactions, as market conditions      allow. As of February 2, 2008 no shares had been purchased under this      plan. During the period from February 3, 2008 through May 3, 2008 we      repurchased a total of 505,406 shares of stock ($5.21 average price paid      per share) in the open market under this program. During the period      from May 4, 2008 through November 1, 2008 no shares were purchased under      this plan. As of November 1, 2008, $197,364,592 was available for      future repurchases under this program. This repurchase program has no      expiration date. |   |

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Item 6. Exhibits

| 2.1    | Stock      Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition      Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown      Traders, Inc. whose names are set forth on the signature pages thereto,      and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,      incorporated by reference to Form 8-K of the Registrant dated June 2,      2005, filed on June 8, 2005.  (File No. 000-07258, Exhibit      2.1). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1    | Restated      Articles of Incorporation, incorporated by reference to Form 10-Q of the      Registrant for the quarter ended August 2, 2008.  (File No.      000-07258, Exhibit 3.1).                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.2    | Bylaws,      as Amended and Restated through July 10, 2008, incorporated by reference      to Form 10-Q of the Registrant for the quarter ended August 2,      2008.  (File No. 000-07258, Exhibit 3.2).                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1    | Indenture      between the Company and Wells Fargo Bank, National Association, dated as      of April 30, 2007, incorporated by reference to Form 8-K of the Registrant      dated April 30, 2007, filed on May 3, 2007.  (File No.      000-07258, Exhibit 4.1).                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2    | Form      of 1.125% Senior Convertible Note due 2012 (included in Exhibit      4.1).                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1   | Form      of Time-Based Restricted Stock Units Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.1).                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2   | Form      of Time-Based Stock Appreciation Rights Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.2).                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3   | Form      of Time-Based Restricted Stock Units Agreement for Other Executive      Officers, incorporated by reference to Form 8-K of the Registrant dated      April 1, 2008, filed on April 7, 2008.  (File No. 000-07258,      Exhibit 10.3).                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4   | Form      of Time-Based Stock Appreciation Rights Agreement for Other Executive      Officers, incorporated by reference to Form 8-K of the Registrant dated      April 1, 2008, filed on April 7, 2008.  (File No. 000-07258,      Exhibit 10.4).                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5   | Form      of Performance-Based Restricted Stock Units Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.5).                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.6   | Form      of Performance-Based Stock Appreciation Rights Agreement for Dorrit J.      Bern, incorporated by reference to Form 8-K of the Registrant dated April      1, 2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.6).                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7   | Form      of Additional Time-Based Restricted Stock Units Agreement for Other      Executive Officers, incorporated by reference to Form 8-K of the      Registrant dated April 1, 2008, filed on April 7, 2008.  (File      No. 000-07258, Exhibit 10.7).                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.8   | Form      of Additional Time-Based Stock Appreciation Rights Agreement for Other      Executive Officers, incorporated by reference to Form 8-K of the      Registrant dated April 1, 2008, filed on April 7, 2008.  (File      No. 000-07258, Exhibit 10.8).                                                                                                                                                                                                                |

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| 10.9   | Form      of Performance-Based EBITDA Stock Appreciation Rights Agreement,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.9).                                                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.10  | Form      of Stock Appreciation Rights Agreement for Alan Rosskamm, incorporated by      reference to Form 10-Q of the Registrant for the quarter ended August      2, 2008.  (File No. 000-07258, Exhibit 10.10).                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11  | Amendment,      dated as of May 15, 2008, to Amended and Restated Receivables Purchase      Agreement dated as of June 2, 2005, by and among Catalog Receivables LLC      as seller; Spirit of America, Inc. as servicer; Sheffield Receivables      Corporation as Purchaser; and Barclays Bank PLC as administrator for the      Purchaser, incorporated by reference to Form 10-Q of the Registrant      for the quarter ended May 3, 2008.  (File No. 000-07258, Exhibit      10.10).                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12  | Letter      Agreement, dated as of June 20, 2008, to Certificate Purchase Agreement,      dated as of May 28, 1999, as amended, among Charming Shoppes Receivables      Corp., as Seller and Class B Purchaser; Spirit of America, Inc., as      Servicer; Clipper Receivables Company, LLC, as Class A Purchaser; and      State Street Global Markets, LLC, as Administrator for the Class A      Purchaser, incorporated by reference to Form 10-Q of the Registrant for      the quarter ended August 2, 2008.  (File No. 000-07258, Exhibit      10.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.13  | Charming      Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan, Amended and      Restated, Effective May 7, 2008, incorporated by reference to Form 10-Q of      the Registrant for the quarter ended May 3, 2008.  (File No.      000-07258, Exhibit 10.12).                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14  | Charming      Shoppes, Inc. Annual Incentive Program – Fiscal 2009, as amended and      restated March 27, 2008, incorporated by reference to Form 10-Q of      the Registrant for the quarter ended May 3, 2008.  (File No.      000-07258, Exhibit 10.13).                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.15  | Settlement      Agreement by and between Charming Shoppes, Inc. and The Charming Shoppes      Full Value Committee dated as of May 8, 2008, incorporated by reference to      Form 8-K of the Registrant dated May 8, 2008, filed on May 9,      2008.  (File No. 000-07258, Exhibit 10.1).                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.16  | Separation      Agreement, dated July 8, 2008, by and between Charming Shoppes, Inc. and      Dorrit J. Bern, incorporated by reference to Form 10-Q of the Registrant      for the quarter ended August 2, 2008.  (File No. 000-07258,      Exhibit 10.1).                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17  | Stock      Purchase Agreement dated as of August 25, 2008 by and between Crosstown      Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and      the other persons listed on the signature page thereto, incorporated by      reference to Form 8-K of the Registrant dated August 25, 2008, filed on      August 28, 2008.  (File No. 000-07258, Exhibit      10.1).                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18  | Purchase      Agreement dated as of August 25, 2008 between Spirit of America National      Bank and World Financial Network National Bank, incorporated by reference      to Form 8-K of the Registrant dated August 25, 2008, filed on August 28,      2008.  (File No. 000-07258, Exhibit 10.2).                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.19  | Private      Label Credit Card Plan Agreement dated as of August 25, 2008 by and      between Arizona Mail Order Company, Inc. and Spirit of America National      Bank, incorporated by reference to Form 8-K of the Registrant dated August      25, 2008, filed on August 28, 2008.  (File No. 000-07258,      Exhibit 10.3).                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.20  | Amendment      No. 1 to Stock Purchase Agreement dated as of August 25, 2008 by and among      Crosstown Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes,      Inc. and the other signatories thereto, made and entered into as of      September 18, 2008, incorporated by reference to Form 8-K of the      Registrant dated September 18, 2008, filed on September 19,      2008.  (File No. 000-07258, Exhibit  10.2).                                                                                                                   |

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| 10.21  | Transition      Services Agreement dated as of September 18, 2008 by and between Charming      Shoppes of Delaware Inc. and Arizona Mail Order Company, incorporated by      reference to Form 8-K of the Registrant dated September 18, 2008, filed on      September 19, 2008.  (File No. 000-07258, Exhibit      10.3).                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.22  | Form      of Amendment dated September 18, 2008 to the Severance Agreements between      certain executive vice presidents and the Company, including the following      named executive officers: Eric M. Specter, Joseph M. Baron, and Colin D.      Stern, incorporated by reference to Form 8-K of the Registrant dated      September 18, 2008, filed on September 24, 2008.  (File No.      000-07258, Exhibit 10.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.23  | Second      Amendment dated as of November 14, 2008 to Series 2004-VFC Supplement,      dated as of January 21, 2004, among Charming Shoppes Receivables Corp, as      Seller, Spirit of America, Inc., as Servicer, and U.S. Bank National      Association, as successor in interest to Wachovia Bank, National      Association, as Trustee, and consented to by Barclays Bank,      PLC.                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.24  | Form      of Charming Shoppes, Inc. 2003 Incentive Compensation Plan Inducement      Grant Stock Appreciation Rights Agreement.                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 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:      December 9, 2008 | /S/      ALAN      ROSSKAMM          |
|                        | Alan      Rosskamm                   |
|                        | Chairman      of the Board           |
|                        | Interim      Chief Executive Officer |
|                        |                                 |
|                        |                                 |
|                        |                                 |
| Date:      December 9, 2008 | /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.  (File No. 000-07258, Exhibit      2.1). |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1              | Restated      Articles of Incorporation, incorporated by reference to Form 10-Q of the      Registrant for the quarter ended August 2, 2008.  (File No.      000-07258, Exhibit 3.1).                                                                                                                                                                                                                                                                                        |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.2              | Bylaws,      as Amended and Restated through July 10, 2008, incorporated by reference      to Form 10-Q of the Registrant for the quarter ended August 2,      2008.  (File No. 000-07258, Exhibit 3.2).                                                                                                                                                                                                                                                                     |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1              | Indenture      between the Company and Wells Fargo Bank, National Association, dated as      of April 30, 2007, incorporated by reference to Form 8-K of the Registrant      dated April 30, 2007, filed on May 3, 2007.  (File No.      000-07258, Exhibit 4.1).                                                                                                                                                                                                            |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2              | Form      of 1.125% Senior Convertible Note due 2012 (included in Exhibit      4.1).                                                                                                                                                                                                                                                                                                                                                                                                   |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1             | Form      of Time-Based Restricted Stock Units Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.1).                                                                                                                                                                                                                                        |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2             | Form      of Time-Based Stock Appreciation Rights Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.2).                                                                                                                                                                                                                                     |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3             | Form      of Time-Based Restricted Stock Units Agreement for Other Executive      Officers, incorporated by reference to Form 8-K of the Registrant dated      April 1, 2008, filed on April 7, 2008.  (File No. 000-07258,      Exhibit 10.3).                                                                                                                                                                                                                              |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4             | Form      of Time-Based Stock Appreciation Rights Agreement for Other Executive      Officers, incorporated by reference to Form 8-K of the Registrant dated      April 1, 2008, filed on April 7, 2008.  (File No. 000-07258,      Exhibit 10.4).                                                                                                                                                                                                                           |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5             | Form      of Performance-Based Restricted Stock Units Agreement for Dorrit J. Bern,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.5).                                                                                                                                                                                                                                 |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.6             | Form      of Performance-Based Stock Appreciation Rights Agreement for Dorrit J.      Bern, incorporated by reference to Form 8-K of the Registrant dated April      1, 2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.6).                                                                                                                                                                                                                              |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7             | Form      of Additional Time-Based Restricted Stock Units Agreement for Other      Executive Officers, incorporated by reference to Form 8-K of the      Registrant dated April 1, 2008, filed on April 7, 2008.  (File      No. 000-07258, Exhibit 10.7).                                                                                                                                                                                                                   |

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| 10.8   | Form      of Additional Time-Based Stock Appreciation Rights Agreement for Other      Executive Officers, incorporated by reference to Form 8-K of the      Registrant dated April 1, 2008, filed on April 7, 2008.  (File      No. 000-07258, Exhibit 10.8).                                                                                                                                                                                                                                                                                                |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.9   | Form      of Performance-Based EBITDA Stock Appreciation Rights Agreement,      incorporated by reference to Form 8-K of the Registrant dated April 1,      2008, filed on April 7, 2008.  (File No. 000-07258, Exhibit      10.9).                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.10  | Form      of Stock Appreciation Rights Agreement for Alan Rosskamm, incorporated by      reference to Form 10-Q of the Registrant for the quarter ended August      2, 2008.  (File No. 000-07258, Exhibit 10.10).                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11  | Amendment,      dated as of May 15, 2008, to Amended and Restated Receivables Purchase      Agreement dated as of June 2, 2005, by and among Catalog Receivables LLC      as seller; Spirit of America, Inc. as servicer; Sheffield Receivables      Corporation as Purchaser; and Barclays Bank PLC as administrator for the      Purchaser, incorporated by reference to Form 10-Q of the Registrant      for the quarter ended May 3, 2008.  (File No. 000-07258, Exhibit      10.10).                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12  | Letter      Agreement, dated as of June 20, 2008, to Certificate Purchase Agreement,      dated as of May 28, 1999, as amended, among Charming Shoppes Receivables      Corp., as Seller and Class B Purchaser; Spirit of America, Inc., as      Servicer; Clipper Receivables Company, LLC, as Class A Purchaser; and      State Street Global Markets, LLC, as Administrator for the Class A      Purchaser, incorporated by reference to Form 10-Q of the Registrant for      the quarter ended August 2, 2008.  (File No. 000-07258, Exhibit      10.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.13  | Charming      Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan, Amended and      Restated, Effective May 7, 2008, incorporated by reference to Form 10-Q of      the Registrant for the quarter ended May 3, 2008.  (File No.      000-07258, Exhibit 10.12).                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14  | Charming      Shoppes, Inc. Annual Incentive Program – Fiscal 2009, as amended and      restated March 27, 2008, incorporated by reference to Form 10-Q of      the Registrant for the quarter ended May 3, 2008.  (File No.      000-07258, Exhibit 10.13).                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.15  | Settlement      Agreement by and between Charming Shoppes, Inc. and The Charming Shoppes      Full Value Committee dated as of May 8, 2008, incorporated by reference to      Form 8-K of the Registrant dated May 8, 2008, filed on May 9,      2008.  (File No. 000-07258, Exhibit 10.1).                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.16  | Separation      Agreement, dated July 8, 2008, by and between Charming Shoppes, Inc. and      Dorrit J. Bern, incorporated by reference to Form 10-Q of the Registrant      for the quarter ended August 2, 2008.  (File No. 000-07258,      Exhibit 10.1).                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17  | Stock      Purchase Agreement dated as of August 25, 2008 by and between Crosstown      Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and      the other persons listed on the signature page thereto, incorporated by      reference to Form 8-K of the Registrant dated August 25, 2008, filed on      August 28, 2008.  (File No. 000-07258, Exhibit      10.1).                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18  | Purchase      Agreement dated as of August 25, 2008 between Spirit of America National      Bank and World Financial Network National Bank, incorporated by reference      to Form 8-K of the Registrant dated August 25, 2008, filed on August 28,      2008.  (File No. 000-07258, Exhibit  10.2).                                                                                                                                                                                                                                                         |

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| 10.19  | Private      Label Credit Card Plan Agreement dated as of August 25, 2008 by and      between Arizona Mail Order Company, Inc. and Spirit of America National      Bank, incorporated by reference to Form 8-K of the Registrant dated August      25, 2008, filed on August 28, 2008.  (File No. 000-07258,      Exhibit 10.3).                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.20  | Amendment      No. 1 to Stock Purchase Agreement dated as of August 25, 2008 by and among      Crosstown Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes,      Inc. and the other signatories thereto, made and entered into as of      September 18, 2008, incorporated by reference to Form 8-K of the      Registrant dated September 18, 2008, filed on September 19,      2008.  (File No. 000-07258, Exhibit 10.2). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.21  | Transition      Services Agreement dated as of September 18, 2008 by and between Charming      Shoppes of Delaware Inc. and Arizona Mail Order Company, incorporated by      reference to Form 8-K of the Registrant dated September 18, 2008, filed on      September 19, 2008.  (File No. 000-07258, Exhibit      10.3).                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.22  | Form      of Amendment dated September 18, 2008 to the Severance Agreements between      certain executive vice presidents and the Company, including the following      named executive officers: Eric M. Specter, Joseph M. Baron, and Colin D.      Stern, incorporated by reference to Form 8-K of the Registrant dated      September 18, 2008, filed on September 24, 2008.  (File No.      000-07258, Exhibit 10.1).               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.23  | Second      Amendment dated as of November 14, 2008 to Series 2004-VFC Supplement,      dated as of January 21, 2004, among Charming Shoppes Receivables Corp, as      Seller, Spirit of America, Inc., as Servicer, and U.S. Bank National      Association, as successor in interest to Wachovia Bank, National      Association, as Trustee, and consented to by Barclays Bank,      PLC.                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.24  | Form      of Charming Shoppes, Inc. 2003 Incentive Compensation Plan Inducement      Grant Stock Appreciation Rights Agreement.                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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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