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

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

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

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Page   |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| PART I.  | FINANCIAL INFORMATION                                                                                                                     | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 1.  | Financial Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Condensed Consolidated Balance Sheets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|     | August 1, 2009 and January 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Condensed Consolidated Statements of Operations and Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|     | Thirteen weeks ended August 1, 2009 and August 2, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3      |
|     | Twenty-six weeks ended August 1, 2009 and August 2, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 4      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Condensed Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|     | Twenty-six weeks ended August 1, 2009 and August 2, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 5      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Notes to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 6      |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 33     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Forward-looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 33     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Critical Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 36     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Recent Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 37     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Overview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 38     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 41     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 52     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 53     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 59     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Impact of Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 60     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 60     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 4.  | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 60     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| PART II. | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 61     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 1.  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 61     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 1A. | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 61     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 63     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 4.  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 63     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| Item 6.  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 64     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | SIGNATURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 67     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|     | Exhibit Index                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 68     |

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | August 1, |      |   | January 31,   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|---------------|--------|
| (In thousands, except share amounts)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2009      |      |   | 2009          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   | (As Adjusted) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      |      |   |          |   |
| Current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |      |      |   |          |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $         | 116,699   |   |          | $      | 93,759 |   |
| Available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |      | 400       |   |          |   | 6,398 |   |
| Accounts receivable, net of allowances of $2,362 and $6,018                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |      | 3,359     |   |          |   | 33,300 |   |
| Investment in asset-backed securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |      | 100,358   |   |          |   | 94,453 |   |
| Merchandise inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |      | 259,473   |   |          |   | 268,142 |   |
| Deferred taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |      | 3,439     |   |          |   | 3,439 |   |
| Prepayments and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |      | 173,352   |   |          |   | 155,430 |   |
| Total current assets                                                                                                |   |      | 657,080   |   |          |   | 654,921 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |   |   |
| Property, equipment, and leasehold improvements – at cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |      | 1,072,785 |   |          |   | 1,076,972 |   |
| Less accumulated depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |      | 726,478   |   |          |   | 693,796 |   |
| Net property, equipment, and leasehold improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |      | 346,307   |   |          |   | 383,176 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |   |   |
| Trademarks and other intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      | 187,132   |   |          |   | 187,365 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |      | 23,436    |   |          |   | 23,436 |   |
| Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |      | 28,251    |   |          |   | 28,243 |   |
| Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $         | 1,242,206 |   |          | $      | 1,277,141 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      |      |   |          |   |   |   |
| Current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |      |      |   |          |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $         | 121,165   |   |          | $      | 99,520 |   |
| Accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      | 152,031   |   |          |   | 166,631 |   |
| Current portion – long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      | 6,483     |   |          |   | 6,746 |   |
| Total current liabilities                                                                                           |   |      | 279,679   |   |          |   | 272,897 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |   |   |
| Deferred taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |      | 47,885    |   |          |   | 46,197 |   |
| Other non-current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |      | 180,062   |   |          |   | 188,470 |   |
| Long-term debt, net of debt discount of $54,459 and $72,913                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |      | 196,257   |   |          |   | 232,722 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |      |   |          |   |   |   |
| Stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      |      |   |          |   |   |   |
| Common Stock $.10 par value:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |      |      |   |          |   |   |   |
| Authorized – 300,000,000 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |      |      |   |          |   |   |   |
| Issued – 154,041,918 shares and 153,482,368 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |      | 15,404    |   |          |   | 15,348 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      | 501,580   |   |          |   | 498,551 |   |
| Treasury stock at cost – 38,491,692 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      | (347,764  | )      |          |   | (347,730 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      | 0         |   |          |   | 5 |   |
| Retained earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |      | 369,103   |   |          |   | 370,681 |   |
| Total stockholders’ equity                                                                                    |   |      | 538,323   |   |          |   | 536,855 |   |
| Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $         | 1,242,206 |   |          | $      | 1,277,141 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| See Notes to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |

----

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                 |   | Thirteen Weeks Ended |    |
|----------------------------------------------------------------------|--------|----------------------|---------|
|                                                                 |   | August 1,            |    |   | August 2, |   |
| (In thousands, except per share amounts)                             |   | 2009                 |    |   | 2008 |   |
|                                                                 |   |                 |    |   | (As Adjusted) |   |
|                                                                 |   |                 |    |   |   |   |
| Net sales                                                            |   | $                    | 527,217 |   |   | $ | 648,616 |   |
|                                                                 |   |                 |    |   |   |   |   |   |
| Cost of goods sold                                                   |   |                 | 263,358 |   |   |   | 345,786 |   |
| Gross profit                                                         |   |                 | 263,859 |   |   |   | 302,830 |   |
|                                                                 |   |                 |    |   |   |   |   |   |
| Occupancy and buying expenses                                        |   |                 | 100,084 |   |   |   | 105,620 |   |
| Selling, general, and administrative expenses                        |   |                 | 134,279 |   |   |   | 164,469 |   |
| Depreciation and amortization                                        |   |                 | 19,192  |   |   |   | 22,988 |   |
| Restructuring and other charges                                      |   |                 | 7,768   |   |   |   | 14,945 |   |
| Total operating expenses                                             |   |                 | 261,323 |   |   |   | 308,022 |   |
|                                                                 |   |                 |    |   |   |   |   |   |
| Income/(loss) from operations                                        |   |                 | 2,536   |   |   |   | (5,192 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Other income                                                         |   |                 | 283     |   |   |   | 792 |   |
| Gain on repurchases of 1.125% Senior Convertible Notes               |   |                 | 7,313   |   |   |   | 0 |   |
| Interest expense                                                     |   |                 | (4,485  | ) |   |   | (4,842 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Income/(loss) from continuing operations before income taxes         |   |                 | 5,647   |   |   |   | (9,242 | ) |
| Income tax provision/(benefit)                                       |   |                 | 664     |   |   |   | (3,719 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Income/(loss) from continuing operations                             |   |                 | 4,983   |   |   |   | (5,523 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Loss from discontinued operations, net of income tax benefit         |   |                 |    |   |   |   |   |   |
| of $2,624 in 2008                                                    |   |                 | 0       |   |   |   | (5,153 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Net income/(loss)                                                    |   |                 | 4,983   |   |   |   | (10,676 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Other comprehensive income, net of tax                               |   |                 |    |   |   |   |   |   |
| Unrealized gains on available-for-sale securities, net of income tax |   |                 |    |   |   |   |   |   |
| provision of $2 in 2008                                              |   |                 | 0       |   |   |   | 1 |   |
|                                                                 |   |                 |    |   |   |   |   |   |
| Comprehensive income/(loss)                                          |   | $                    | 4,983   |   |   | $ | (10,675 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Basic net income/(loss) per share:                                   |   |                 |    |   |   |   |   |   |
| Income/(loss) from continuing operations                             |   | $                    | .04     |   |   | $ | (.05 | ) |
| Loss from discontinued operations                                    |   |                 | .00     |   |   |   | (.05 | ) |
| Net income/(loss)(1)                                                 |   | $                    | .04     |   |   | $ | (.09 | ) |
|                                                                 |   |                 |    |   |   |   |   |   |
| Diluted net income/(loss) per share:                                 |   |                 |    |   |   |   |   |   |
| Income/(loss) from continuing operations                             |   | $                    | .04     |   |   | $ | (.05 | ) |
| Loss from discontinued operations                                    |   |                 | .00     |   |   |   | (.05 | ) |
| Net income/(loss)(1)                                                 |   | $                    | .04     |   |   | $ | (.09 | ) |
|                                                                 |   |
| See Notes to Condensed Consolidated Financial Statements             |   |
| ____________________                                                 |   |
| (1)   Results may not add due to rounding.                 |   |

----

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                  |   | Twenty-six Weeks Ended |      |
|-----------------------------------------------------------------------|--------|------------------------|-----------|
|                                                                  |   | August 1,              |      |   | August 2, |   |
| (In thousands, except per share amounts)                              |   | 2009                   |      |   | 2008 |   |
|                                                                  |   |                   |      |   | (As Adjusted) |   |
|                                                                  |   |                   |      |   |   |   |
| Net sales                                                             |   | $                      | 1,065,353 |   |   | $ | 1,289,962 |   |
|                                                                  |   |                   |      |   |   |   |   |   |
| Cost of goods sold                                                    |   |                   | 513,919   |   |   |   | 660,213 |   |
| Gross profit                                                          |   |                   | 551,434   |   |   |   | 629,749 |   |
|                                                                  |   |                   |      |   |   |   |   |   |
| Occupancy and buying expenses                                         |   |                   | 202,640   |   |   |   | 212,348 |   |
| Selling, general, and administrative expenses                         |   |                   | 291,781   |   |   |   | 350,781 |   |
| Depreciation and amortization                                         |   |                   | 39,274    |   |   |   | 49,499 |   |
| Restructuring and other charges                                       |   |                   | 16,473    |   |   |   | 18,556 |   |
| Total operating expenses                                              |   |                   | 550,168   |   |   |   | 631,184 |   |
|                                                                  |   |                   |      |   |   |   |   |   |
| Income/(loss) from operations                                         |   |                   | 1,266     |   |   |   | (1,435 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Other income                                                          |   |                   | 481       |   |   |   | 1,307 |   |
| Gain on repurchases of 1.125% Senior Convertible Notes                |   |                   | 11,564    |   |   |   | 0 |   |
| Interest expense                                                      |   |                   | (9,505    | ) |   |   | (9,803 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Income/(loss) from continuing operations before income taxes          |   |                   | 3,806     |   |   |   | (9,931 | ) |
| Income tax provision/(benefit)                                        |   |                   | 5,384     |   |   |   | (3,459 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Loss from continuing operations                                       |   |                   | (1,578    | ) |   |   | (6,472 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Loss from discontinued operations, net of income tax benefit          |   |                   |      |   |   |   |   |   |
| of $12,698 in 2008                                                    |   |                   | 0         |   |   |   | (51,047 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Net loss                                                              |   |                   | (1,578    | ) |   |   | (57,519 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Other comprehensive loss, net of tax                                  |   |                   |      |   |   |   |   |   |
| Unrealized losses on available-for-sale securities, net of income tax |   |                   |      |   |   |   |   |   |
| benefit of $13 in 2008                                                |   |                   | (5        | ) |   |   | (24 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Comprehensive loss                                                    |   | $                      | (1,583    | ) |   | $ | (57,543 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Basic net loss per share:                                             |   |                   |      |   |   |   |   |   |
| Loss from continuing operations                                       |   | $                      | (.01      | ) |   | $ | (.06 | ) |
| Loss from discontinued operations                                     |   |                   | .00       |   |   |   | (.45 | ) |
| Net loss(1)                                                           |   | $                      | (.01      | ) |   | $ | (.50 | ) |
|                                                                  |   |                   |      |   |   |   |   |   |
| Diluted net loss per share:                                           |   |                   |      |   |   |   |   |   |
| Loss from continuing operations                                       |   | $                      | (.01      | ) |   | $ | (.06 | ) |
| Loss from discontinued operations                                     |   |                   | .00       |   |   |   | (.45 | ) |
| Net loss(1)                                                           |   | $                      | (.01      | ) |   | $ | (.50 | ) |
|                                                                  |   |
| See Notes to Condensed Consolidated Financial Statements              |   |
| ____________________                                                  |   |
| (1)   Results may not add due to rounding.                  |   |

----

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Twenty-six Weeks Ended |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | August 1,              |    |   | August 2, |   |
| (In thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2009                   |    |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   | (As Adjusted) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |
| Operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |
| Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                      | (1,578  | ) |   | $ | (57,519 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                   |    |   |   |   |   |   |
| Depreciation and amortization                                                                                                                                 |   |                   | 40,501  |   |   |   | 50,382 |   |
| Stock-based compensation                                                                                                                                      |   |                   | 2,974   |   |   |   | 5,014 |   |
| Net loss/(gain) from disposition of capital assets                                                                                                            |   |                   | 237     |   |   |   | (1,066 | ) |
| Net loss/(gain) from securitization activities                                                                                                                |   |                   | 178     |   |   |   | (83 | ) |
| Accretion of discount on 1.125% Senior Convertible Notes                                                                                                      |   |                   | 5,434   |   |   |   | 5,417 |   |
| Estimated loss on disposition of discontinued operations                                                                                                      |   |                   | 0       |   |   |   | 42,768 |   |
| Deferred income taxes                                                                                                                                         |   |                   | 1,691   |   |   |   | (2,091 | ) |
| Gain on repurchases of 1.125% Senior Convertible Notes                                                                                                        |   |                   | (11,564 | ) |   |   | 0 |   |
| Write-down of deferred taxes related to stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                   | 0       |   |   |   | (1,333 | ) |
| Write-down of capital assets                                                                                                                                  |   |                   | 7,128   |   |   |   | 2,217 |   |
| Changes in operating assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   |    |   |   |   |   |   |
| Accounts receivable, net                                                                                                                                                          |   |                   | 29,941  |   |   |   | 29,995 |   |
| Merchandise inventories                                                                                                                                                           |   |                   | 8,669   |   |   |   | 95 |   |
| Accounts payable                                                                                                                                                                  |   |                   | 21,645  |   |   |   | 32,242 |   |
| Prepayments and other                                                                                                                                                             |   |                   | (23,053 | ) |   |   | 4,054 |   |
| Accrued expenses and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                   | (24,790 | ) |   |   | 1,425 |   |
| Net cash provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                   | 57,413  |   |   |   | 111,517 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Investment in capital assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                   | (9,766  | ) |   |   | (38,459 | ) |
| Proceeds from sales of capital assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   | 1,219   |   |   |   | 4,813 |   |
| Gross purchases of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                   | (1,698  | ) |   |   | (3,489 | ) |
| Proceeds from sales of securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                   | 8,588   |   |   |   | 10,719 |   |
| Decrease in other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                   | 3,354   |   |   |   | 459 |   |
| Net cash provided/(used) by investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                   | 1,697   |   |   |   | (25,957 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Proceeds from long-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                   | 0       |   |   |   | 108 |   |
| Repayments of long-term borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                   | (3,448  | ) |   |   | (4,579 | ) |
| Repurchases of 1.125% Senior Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                   | (26,617 | ) |   |   | 0 |   |
| Net payments for settlements of hedges on convertible notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   | (31     | ) |   |   | 0 |   |
| Payments of deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   | (6,328  | ) |   |   | (46 | ) |
| Purchases of treasury stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   | 0       |   |   |   | (10,969 | ) |
| Net proceeds/(payments) from shares issued under employee stock plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   | 254     |   |   |   | (62 | ) |
| Net cash used by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   | (36,170 | ) |   |   | (15,548 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                   | 22,940  |   |   |   | 70,012 |   |
| Cash and cash equivalents, beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                   | 93,759  |   |   |   | 61,842 |   |
| Cash and cash equivalents, end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                      | 116,699 |   |   | $ | 131,854 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                   |    |   |   |   |   |   |
| Non-cash financing and investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                   |    |   |   |   |   |   |
| Assets acquired through capital leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                      | 0       |   |   | $ | 5,959 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| See Notes to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |

----

CHARMING SHOPPES, INC. AND SUBSIDIARIES

|                                                                                                                                                                                                                                                                                                                                |   | Thirteen Weeks Ended |    |   | Year Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                |   | May 3,               |    |   | August 2,  |   |   | November 1, |   |   | January 31, |   |   | January 31, |   |
| (In thousands)                                                                                                                                                                                                                                                                                                                      |   | 2008                 |    |   | 2008       |   |   | 2008 |   |   | 2009 |   |   | 2009 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                 |    |   |       |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                                                             |   | $                    | 314,427 |   |       | $      | 345,786 |   |   | $ | 299,195 |   |   | $ | 367,979 |   |   | $ | 1,327,387 |   |
| Gross profit                                                                   |   |                 | 326,919 |   |       |   | 302,830 |   |   |   | 253,871 |   |   |   | 263,891 |   |   |   | 1,147,511 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                 |    |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                                                                                                                                                                                                                                                                                 |   |                 |    |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy and buying                                                           |   |                 | 106,728 |   |       |   | 105,620 |   |   |   | 106,553 |   |   |   | 108,940 |   |   |   | 427,841 |   |
| Selling, general, and administrative                                                                                                                                                                                                                                                                                                |   |                 | 186,312 |   |       |   | 164,469 |   |   |   | 166,338 |   |   |   | 172,976 |   |   |   | 690,095 |   |
| Depreciation and amortization                                                  |   |                 | 26,511  |   |       |   | 22,988 |   |   |   | 23,131 |   |   |   | 21,111 |   |   |   | 93,741 |   |

----

----

|                                                                                                                                                                                                              |   | Thirteen    |   |   | Twenty-six  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|
|                                                                                                                                                                                                              |   | Weeks Ended |   |   | Weeks Ended |   |
|                                                                                                                                                                                                              |   | August 2,   |   |   | August 2,   |   |
| (In thousands)                                                                                                                                                                                                    |   | 2008        |   |   | 2008        |   |
|                                                                                                                                                                                                              |   |        |   |   |        |   |
| Net sales                                                                                                                                                                                                         |   | $           | 56,569 |   |        | $      | 121,248 |   |
|                                                                                                                                                                                                              |   |        |   |   |        |   |   |   |
| Loss from discontinued operations                                                                                                                                                                                 |   | $           | (7,777 | )(1)   |        | $      | (63,745 | )(2) |
| Income tax benefit                                                                                                                                                                                                |   |        | (2,624 | )(1)   |        |   | (12,698 | )(2) |
| Loss from discontinued operations, net of income tax benefit                                                                                                                                                      |   | $           | (5,153 | )(1)   |        | $      | (51,047 | )(2) |
| ____________________                                                                                                                                                                                              |   |
| (1)   Includes reduction of estimated loss on disposition of $980, net of a reduction in income tax benefit of $1,503 and a loss from operations of ($6,133), net of an income tax benefit of ($4,127). |   |
| (2)   Includes an estimated loss on disposition of ($38,190), net of an income tax benefit of ($4,578) and a loss from operations of ($12,857), net of an income tax benefit of ($8,120).               |   |

----

| 2004 Stock Award and Incentive Plan           |   |   | 2,322,935 |   |
|-----------------------------------------------|--------|--------|-----------|--------|
| 2003 Non-Employee Directors Compensation Plan |   |   | 121,897   |   |
| 1994 Employee Stock Purchase Plan             |   |   | 624,421   |   |
| 1988 Key Employee Stock Option Plan           |   |   | 119,004   |   |

----

|                                                                  |   |   |      |   |    |   |   |          |   |   | Aggregate |          |
|-----------------------------------------------------------------------|--------|--------|-----------|--------|---------|--------|--------|---------------|--------|--------|-----------|---------------|
|                                                                  |   |   |      |   | Average |   |   |          |   |   | Intrinsic |          |
|                                                                  |   | Option |      |   | Option  |   |   | Option Prices |   |   | Value(1)  |          |
|                                                                  |   | Shares |      |   | Price   |   |   | Per Share     |   |   |      | (000’s) |   |
|                                                                  |   |   |      |   |    |   |   |          |   |   |      |          |   |   |   |   |   |   |
| Outstanding at January 31, 2009                                       |   |   | 3,292,385 |   |    | $      | 5.09   |          |   | $      | 1.00      |          |   | – |   |   | $ | 13.84 |   |   | $ | 0 |   |
| Granted – exercise price equal to market price                  |   |   | 4,692,300 |   |    |   | 1.68   |          |   |   | 0.99      |          |   | – |   |   |   | 4.74 |   |   |   |   |   |
| Canceled/forfeited                                                    |   |   | (446,446  | )      |    |   | 5.18   |          |   |   | 1.00      |          |   | – |   |   |   | 11.28 |   |   |   |   |   |
| Exercised                                                             |   |   | (2,432    | )      |    |   | 1.00   |          |   |   | 1.00      |          |   | – |   |   |   | 1.00 |   |   |   | 6 | (2) |
| Outstanding at August 1, 2009                                         |   |   | 7,535,807 |   |    | $      | 2.96   |          |   | $      | 0.99      |          |   | – |   |   | $ | 13.84 |   |   | $ | 13,765 |   |
| Exercisable at August 1, 2009                                         |   |   | 1,360,009 |   |    | $      | 6.35   |          |   | $      | 1.00      |          |   | – |   |   | $ | 13.84 |   |   | $ | 0 |   |
| ____________________                                                  |   |
| (1)   Aggregate market value less aggregate exercise price. |   |
| (2)   As of date of exercise.                          |   |

|                                   |   | Thirteen Weeks Ended |   |   | Twenty-six Weeks Ended |   |
|----------------------------------------|--------|----------------------|--------|--------|------------------------|--------|
|                                   |   | August 1,            |   |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
| (In thousands)                         |   | 2009                 |   |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                   |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Total stock-based compensation expense |   | $                    | 1,264  |   |                   | $      | 2,116 |   |   | $ | 2,974 |   |   | $ | 5,014 |   |

----

|                            |   | August 1, |   |   | January 31, |   |
|---------------------------------|--------|-----------|--------|--------|-------------|--------|
| (In thousands)                  |   | 2009      |   |   | 2009        |   |
|                            |   |      |   |   |        |   |
| Due from customers              |   | $         | 5,721  |   |        | $      | 39,318 |   |
| Allowance for doubtful accounts |   |      | (2,362 | )      |        |   | (6,018 | ) |
| Net accounts receivable         |   | $         | 3,359  |   |        | $      | 33,300 |   |

|                                                    |   | August 1, |    |   | January 31, |   |
|---------------------------------------------------------|--------|-----------|---------|--------|-------------|--------|
| (In thousands)                                          |   | 2009      |    |   | 2009        |   |
|                                                    |   |      |    |   |        |   |
| Trademarks, tradenames, and internet domain names       |   | $         | 187,132 |   |        | $      | 187,132 |   |
| Customer relationships                                  |   |      | 2,872   |   |        |   | 2,872 |   |
| Total at cost                                           |   |      | 190,004 |   |        |   | 190,004 |   |
| Less accumulated amortization of customer relationships |   |      | 2,872   |   |        |   | 2,639 |   |
| Net trademarks and other intangible assets              |   | $         | 187,132 |   |        | $      | 187,365 |   |

----

|                                                         |   | August 1, |    |   | January 31,   |   |
|--------------------------------------------------------------|--------|-----------|---------|--------|---------------|--------|
| (In thousands)                                               |   | 2009      |    |   | 2009          |   |
|                                                         |   |      |    |   | (As Adjusted) |   |
|                                                         |   |      |    |   |          |   |
| 1.125% Senior Convertible Notes, due May 2014                |   | $         | 223,265 |   |          | $      | 275,000 |   |
| Capital lease obligations                                    |   |      | 12,113  |   |          |   | 14,041 |   |
| 6.07% mortgage note, due October 2014                        |   |      | 10,071  |   |          |   | 10,419 |   |
| 6.53% mortgage note, due November 2012                       |   |      | 4,550   |   |          |   | 5,250 |   |
| 7.77% mortgage note, due December 2011                       |   |      | 6,906   |   |          |   | 7,249 |   |
| Other long-term debt                                         |   |      | 294     |   |          |   | 422 |   |
| Total long-term debt principal                               |   |      | 257,199 |   |          |   | 312,381 |   |
| Less unamortized discount on 1.125% Senior Convertible Notes |   |      | (54,459 | )      |          |   | (72,913 | ) |
| Long-term debt – carrying value                        |   |      | 202,740 |   |          |   | 239,468 |   |
| Current portion                                              |   |      | (6,483  | )      |          |   | (6,746 | ) |
| Net long-term debt                                           |   | $         | 196,257 |   |          | $      | 232,722 |   |

----

|                                                   |   | August 1, |    |   | January 31, |   |
|--------------------------------------------------------|--------|-----------|---------|--------|-------------|--------|
| (In thousands)                                         |   | 2009      |    |   | 2009        |   |
|                                                   |   |      |    |   |        |   |
| Equity component of 1.125% Senior Convertible Notes    |   | $         | 91,569  |   |        | $      | 91,715 |   |
|                                                   |   |      |    |   |        |   |   |   |
| Principal value of 1.125% Senior Convertible Notes     |   | $         | 223,265 |   |        | $      | 275,000 |   |
| Unamortized discount                                   |   |      | (54,459 | )      |        |   | (72,913 | ) |
| Liability component of 1.125% Senior Convertible Notes |   | $         | 168,806 |   |        | $      | 202,087 |   |

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

----

|                          |   | Thirteen Weeks Ended |   |   | Twenty-six Weeks Ended |   |
|-------------------------------|--------|----------------------|--------|--------|------------------------|--------|
|                          |   | August 1,            |   |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
| (Dollars in thousands)        |   | 2009                 |   |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                          |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Contractual interest expense  |   | $                    | 670    |   |                   | $      | 773 |   |   | $ | 1,444 |   |   | $ | 1,547 |   |
| Amortization of debt discount |   |                 | 2,550  |   |                   |   | 2,733 |   |   |   | 5,434 |   |   |   | 5,417 |   |
| Total interest expense        |   | $                    | 3,220  |   |                   | $      | 3,506 |   |   | $ | 6,878 |   |   | $ | 6,964 |   |
|                          |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Effective interest rate       |   |                 | 7.4    | %      |                   |   | 7.4 | % |   |   | 7.4 | % |   |   | 7.4 | % |

|                                                                                                                                                 |   | Before   |   |   | Adoption of  |   |   | As       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|--------------|--------|--------|----------|--------|
| (In thousands, except per-share amounts)                                                                                                             |   | Adoption |   |   | FSP APB 14-1 |   |   | Adjusted |   |
|                                                                                                                                                 |   |     |   |   |         |   |   |     |   |
| Thirteen weeks ended August 1, 2009                                                                                                                  |   |     |   |   |         |   |   |     |   |
| Interest expense                                                                                                                                     |   | $        | 2,027  |   |         | $      | 2,458  | (1)      |   | $ | 4,485 |   |
| Income tax provision                                                                                                                                 |   |     | 664    |   |         |   | 0      |     |   |   | 664 |   |
| Income from continuing operations                                                                                                                    |   |     | 7,441  |   |         |   | (2,458 | )        |   |   | 4,983 |   |
| Net income                                                                                                                                           |   |     | 7,441  |   |         |   | (2,458 | )        |   |   | 4,983 |   |
| Basic net income per share                                                                                                                           |   |     | 0.06   |   |         |   | (0.02  | )        |   |   | 0.04 |   |
| Diluted net income per share                                                                                                                         |   |     | 0.06   |   |         |   | (0.02  | )        |   |   | 0.04 |   |
|                                                                                                                                                 |   |     |   |   |         |   |   |     |   |   |   |   |
| Twenty-six weeks ended August 1, 2009                                                                                                                |   |     |   |   |         |   |   |     |   |   |   |   |
| Interest expense                                                                                                                                     |   | $        | 4,255  |   |         | $      | 5,250  | (1)      |   | $ | 9,505 |   |
| Income tax provision                                                                                                                                 |   |     | 5,384  |   |         |   | 0      |     |   |   | 5,384 |   |
| Loss from continuing operations                                                                                                                      |   |     | 3,672  |   |         |   | (5,250 | )        |   |   | (1,578 | ) |
| Net loss                                                                                                                                             |   |     | 3,672  |   |         |   | (5,250 | )        |   |   | (1,578 | ) |
| Basic net loss per share(2)                                                                                                                     |   |     | 0.03   |   |         |   | (0.05  | )        |   |   | (0.01 | ) |
| Diluted net loss per share(2)                                                                                                                   |   |     | 0.03   |   |         |   | (0.05  | )        |   |   | (0.01 | ) |
| ____________________                                                                                                                                 |   |
| (1)   Amortization of the debt discount related to the 1.125% Notes less amortization of debt issue costs related to the equity component. |   |
| (2)   Results do not add across due to rounding.                                                                                           |   |

----

|                                                                                                                                                 |   | As Previously |    |   | Adoption of  |   |   | As       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|--------------|--------|--------|----------|--------|
| (In thousands, except per-share amounts)                                                                                                             |   | Reported      |    |   | FSP APB 14-1 |   |   | Adjusted |   |
|                                                                                                                                                 |   |          |    |   |         |   |   |     |   |
| Thirteen weeks ended August 2, 2008                                                                                                                  |   |          |    |   |         |   |   |     |   |
| Interest expense                                                                                                                                     |   | $             | 2,201   |   |         | $      | 2,641  | (1)      |   | $ | 4,842 |   |
| Income tax benefit                                                                                                                                   |   |          | (2,891  | )      |         |   | (828   | )(2)     |   |   | (3,719 | ) |
| Loss from continuing operations                                                                                                                      |   |          | (3,710  | )      |         |   | (1,813 | )        |   |   | (5,523 | ) |
| Net loss                                                                                                                                             |   |          | (8,863  | )      |         |   | (1,813 | )        |   |   | (10,676 | ) |
| Basic net loss per share:                                                                                                                            |   |          |    |   |         |   |   |     |   |   |   |   |
| Continuing operations                                                                                                                                |   |          | (0.03   | )      |         |   | (0.02  | )        |   |   | (0.05 | ) |
| Net loss(3)                                                                                                                                     |   |          | (0.08   | )      |         |   | (0.02  | )        |   |   | (0.09 | ) |
| Diluted net loss per share:                                                                                                                          |   |          |    |   |         |   |   |     |   |   |   |   |
| Continuing operations                                                                                                                                |   |          | (0.03   | )      |         |   | (0.02  | )        |   |   | (0.05 | ) |
| Net loss(3)                                                                                                                                     |   |          | (0.08   | )      |         |   | (0.02  | )        |   |   | (0.09 | ) |
|                                                                                                                                                 |   |          |    |   |         |   |   |     |   |   |   |   |
| Twenty-six weeks ended August 2, 2008                                                                                                                |   |          |    |   |         |   |   |     |   |   |   |   |
| Interest expense                                                                                                                                     |   | $             | 4,570   |   |         | $      | 5,233  | (1)      |   | $ | 9,803 |   |
| Income tax benefit                                                                                                                                   |   |          | (1,645  | )      |         |   | (1,814 | )(2)     |   |   | (3,459 | ) |
| Loss from continuing operations                                                                                                                      |   |          | (3,053  | )      |         |   | (3,419 | )        |   |   | (6,472 | ) |
| Net loss                                                                                                                                             |   |          | (54,100 | )      |         |   | (3,419 | )        |   |   | (57,519 | ) |
| Basic net loss per share:                                                                                                                            |   |          |    |   |         |   |   |     |   |   |   |   |
| Continuing operations                                                                                                                                |   |          | (0.03   | )      |         |   | (0.03  | )        |   |   | (0.06 | ) |
| Net loss                                                                                                                                             |   |          | (0.47   | )      |         |   | (0.03  | )        |   |   | (0.50 | ) |
| Diluted net loss per share:                                                                                                                          |   |          |    |   |         |   |   |     |   |   |   |   |
| Continuing operations                                                                                                                                |   |          | (0.03   | )      |         |   | (0.03  | )        |   |   | (0.06 | ) |
| Net loss                                                                                                                                             |   |          | (0.47   | )      |         |   | (0.03  | )        |   |   | (0.50 | ) |
| ____________________                                                                                                                                 |   |
| (1)   Amortization of the debt discount related to the 1.125% Notes less amortization of debt issue costs related to the equity component. |   |
| (2)   Tax effect of adoption of FSP APB 14-1.                                                                                              |   |
| (3)   Results do not add across due to rounding.                                                                                           |   |

----

----

|                                                                                                                                                                                                                                                             |   | Twenty-six  |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|
|                                                                                                                                                                                                                                                             |   | Weeks Ended |    |
|                                                                                                                                                                                                                                                             |   | August 1,   |    |
| (Dollars in thousands)                                                                                                                                                                                                                                           |   | 2009        |    |
|                                                                                                                                                                                                                                                             |   |        |    |
| Total stockholders’ equity, beginning of period (as adjusted)                                                                                                                                                                                              |   | $           | 536,855 | (1) |
| Net loss                                                                                                                                                                                                                                                         |   |        | (1,578  | ) |
| Issuance of common stock (559,550 shares), net of shares withheld for payroll taxes                                                                                                                                                                              |   |        | 254     |   |
| Stock-based compensation                                                                                                                                                                                                                                         |   |        | 2,974   |   |
| Net payments for settlement of hedges on convertible notes                                                                                                                                                                                                       |   |        | (31     | )(2) |
| Equity component of repurchases of 1.125% Senior Convertible Notes                                                                                                                                                                                               |   |        | (146    | )(2) |
| Unrealized losses on available-for-sale securities                                                                                                                                                                                                               |   |        | (5      | ) |
| Total stockholders’ equity, end of period                                                                                                                                                                                                                  |   | $           | 538,323 |   |
| ____________________                                                                                                                                                                                                                                             |   |
| (1)   We adopted the provisions of FSP APB 14-1 retrospectively as of the beginning of Fiscal 2009 and recognized a net increase in stockholders’ equity of $70,989,000 as of January 31, 2009 (see “Note 4. Long-term Debt” above). |   |
| (2)   See “Note 4. Long-term Debt” above.                                                                                                                                                                                                  |   |

----

|                                                                                                                                                                                         |   | Thirteen Weeks Ended |    |   | Twenty-six Weeks Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|---------|--------|------------------------|--------|
|                                                                                                                                                                                         |   | August 1,            |    |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
| (In thousands, except per share amounts)                                                                                                                                                     |   | 2009                 |    |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                                         |   |                 |    |   | (As Adjusted)          |   |   |   |   |   | (As Adjusted) |   |
|                                                                                                                                                                                         |   |                 |    |   |                   |   |   |   |   |   |   |   |
| Basic weighted average common shares outstanding                                                                                                                                             |   |                 | 115,612 |   |                   |   | 114,342 |   |   |   | 115,396 |   |   |   | 114,465 |   |
| Dilutive effect of stock options, stock appreciation rights, and awards                                                                                                                      |   |                 | 3,319   |   |                   |   | 0 | (1) |   |   | 0 | (1) |   |   | 0 | (1) |
| Diluted weighted average common shares and equivalents outstanding                                                                                                                           |   |                 | 118,931 |   |                   |   | 114,342 |   |   |   | 115,396 |   |   |   | 114,465 |   |
|                                                                                                                                                                                         |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Income/(loss) from continuing operations                                                                                                                                                     |   | $                    | 4,983   |   |                   | $      | (5,523 | ) |   | $ | (1,578 | ) |   | $ | (6,472 | ) |
| Loss from discontinued operations, net of income tax benefit                                                                                                                                 |   |                 | 0       |   |                   |   | (5,153 | ) |   |   | 0 |   |   |   | (51,047 | ) |
| Net income/(loss) used to determine diluted                                                                                                                                                  |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| net income/(loss) per share                                                                                                                                                                  |   | $                    | 4,983   |   |                   | $      | (10,676 | ) |   | $ | (1,578 | ) |   | $ | (57,519 | ) |
|                                                                                                                                                                                         |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Options with weighted average exercise price greater                                                                                                                                         |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| than market price, excluded from computation of net                                                                                                                                          |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| income/(loss) per share:                                                                                                                                                                     |   |                 |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Number of shares                                                                                                                                                                             |   |                 | 1,160   |   |                   |   | – | (1) |   |   | – | (1) |   |   | – | (1) |
| Weighted average exercise price per share                                                                                                                                                    |   | $                    | 6.63    |   |                   |   | – | (1) |   |   | – | (1) |   |   | – | (1) |
| ____________________                                                                                                                                                                         |   |
| (1)   Stock options, stock appreciation rights, and awards are excluded from the computation of diluted net income/(loss) per share as their effect would have been anti-dilutive. |   |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Twenty-six Weeks Ended |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | August 1,              |    |   | August 2, |   |
| (In thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2009                   |    |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                   |    |   |   |   |
| Proceeds from sales of new receivables to QSPE                                                                                                                              |   | $                      | 359,677 |   |   | $ | 455,716 |   |
| Collections reinvested in revolving-period securitizations                                                                                                                  |   |                   | 464,226 |   |   |   | 567,889 |   |
| Cash flows received on retained interests                                                                                                                                   |   |                   | 43,031  |   |   |   | 54,518 |   |
| Servicing fees received                                                                                                                                                     |   |                   | 4,888   |   |   |   | 5,742 |   |
| Net credit losses                                                                                                                                                           |   |                   | 22,593  |   |   |   | 22,278 |   |
| Credit card balances 90 or more days delinquent at end of year                                                                                                              |   |                   | 18,340  |   |   |   | 19,467 |   |

----

|                              | August 1,             |   |   | January 31,           |
|-----------------------------------|-----------------------|--------|--------|-----------------------|
|                              | 2009                  |   |   | 2009                  |
|                              |                  |   |   |                  |
| Payment rate                      | 11.5 – 14.0%    |   |   | 12.1 – 14.6%    |
| Residual cash flows discount rate | 15.5 – 16.5%    |   |   | 15.5 – 16.5%    |
| Net credit loss percentage        | 7.25 – 12.0%    |   |   | 6.75 – 11.75%   |
| Average life of receivables sold  | 0.6 – 0.7 years |   |   | 0.6 – 0.7 years |

|                                              |   | August 1, |    |   | January 31, |   |
|---------------------------------------------------|--------|-----------|---------|--------|-------------|--------|
| (In thousands)                                    |   | 2009      |    |   | 2009        |   |
|                                              |   |      |    |   |        |   |
| Trading securities                                |   |      |    |   |        |   |
| I/O Strip                                         |   | $         | 19,089  |   |        | $      | 19,298 |   |
| Retained interest (primarily collateralized cash) |   |      | 30,769  |   |        |   | 23,755 |   |
|                                              |   |      |    |   |        |   |   |   |
| Available-for-sale securities                     |   |      |    |   |        |   |   |   |
| Ownership interest                                |   |      | 50,500  |   |        |   | 51,400 |   |
|                                              |   |      |    |   |        |   |   |   |
| Investment in asset-backed securities             |   | $         | 100,358 |   |        | $      | 94,453 |   |

----

----

----

|                                                                                                                                                                                                                                                           |   | Retail |      |   | Direct-to- |   |   | Corporate |   |   |         |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|------------|--------|--------|-----------|--------|--------|--------------|--------|
| (In thousands)                                                                                                                                                                                                                                                 |   | Stores |      |   | Consumer   |   |   | and Other |   |   | Consolidated |   |
|                                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   |         |   |
| Thirteen weeks ended August 1, 2009                                                                                                                                                                                                                            |   |   |      |   |       |   |   |      |   |   |         |   |
| Net sales                                                                                                                                                                                                                                                      |   | $      | 518,190   |   |       | $      | 6,348  |      |   | $      | 2,679        |   |   | $ | 527,217 |   |
| Depreciation and amortization                                                                                                                                                                                                                                  |   |   | 12,676    |   |       |   | 214    |      |   |   | 6,302        |   |   |   | 19,192 |   |
| Income before interest and taxes                                                                                                                                                                                                                               |   |   | 24,944    |   |       |   | (3,802 | )         |   |   | (11,010      | )(1)   |   |   | 10,132 |   |
| Interest expense                                                                                                                                                                                                                                               |   |   |      |   |       |   |   |      |   |   | (4,485       | )      |   |   | (4,485 | ) |
| Income tax provision                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   | 664          |   |   |   | 664 |   |
| Net income                                                                                                                                                                                                                                                     |   |   | 24,944    |   |       |   | (3,802 | )         |   |   | (16,159      | )      |   |   | 4,983 |   |
| Capital expenditures                                                                                                                                                                                                                                           |   |   | 1,541     |   |       |   | 14     |      |   |   | 3,509        |   |   |   | 5,064 |   |
|                                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Thirteen weeks ended August 2, 2008 (As adjusted)                                                                                                                                                                                                              |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                                                      |   | $      | 622,812   |   |       | $      | 22,547 |      |   | $      | 3,257        |   |   | $ | 648,616 |   |
| Depreciation and amortization                                                                                                                                                                                                                                  |   |   | 14,593    |   |       |   | 221    |      |   |   | 8,174        |   |   |   | 22,988 | (3) |
| Loss before interest and taxes                                                                                                                                                                                                                                 |   |   | 38,173    |   |       |   | (5,598 | )         |   |   | (36,975      | )(2)   |   |   | (4,400 | ) |
| Interest expense                                                                                                                                                                                                                                               |   |   |      |   |       |   |   |      |   |   | (4,842       | )      |   |   | (4,842 | ) |
| Income tax benefit                                                                                                                                                                                                                                             |   |   |      |   |       |   |   |      |   |   | (3,719       | )      |   |   | (3,719 | ) |
| Loss from continuing operations                                                                                                                                                                                                                                |   |   | 38,173    |   |       |   | (5,598 | )         |   |   | (38,098      | )      |   |   | (5,523 | ) |
| Capital expenditures                                                                                                                                                                                                                                           |   |   | 13,438    |   |       |   | 276    |      |   |   | 2,585        |   |   |   | 16,299 | (3) |
|                                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Twenty-six weeks ended August 1, 2009                                                                                                                                                                                                                          |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                                                      |   | $      | 1,033,820 |   |       | $      | 25,803 |      |   | $      | 5,730        |   |   | $ | 1,065,353 |   |
| Depreciation and amortization                                                                                                                                                                                                                                  |   |   | 25,509    |   |       |   | 440    |      |   |   | 13,325       |   |   |   | 39,274 |   |
| Income before interest and taxes                                                                                                                                                                                                                               |   |   | 63,495    |   |       |   | (7,239 | )         |   |   | (42,945      | )(4)   |   |   | 13,311 |   |
| Interest expense                                                                                                                                                                                                                                               |   |   |      |   |       |   |   |      |   |   | (9,505       | )      |   |   | (9,505 | ) |
| Income tax provision                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   | 5,384        |   |   |   | 5,384 |   |
| Net loss                                                                                                                                                                                                                                                       |   |   | 63,495    |   |       |   | (7,239 | )         |   |   | (57,834      | )      |   |   | (1,578 | ) |
| Capital expenditures                                                                                                                                                                                                                                           |   |   | 5,148     |   |       |   | 12     |      |   |   | 4,606        |   |   |   | 9,766 |   |
|                                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Twenty-six weeks ended August 2, 2008 (As adjusted)                                                                                                                                                                                                            |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                                                      |   | $      | 1,234,103 |   |       | $      | 49,493 |      |   | $      | 6,366        |   |   | $ | 1,289,962 |   |
| Depreciation and amortization                                                                                                                                                                                                                                  |   |   | 28,438    |   |       |   | 444    |      |   |   | 20,617       |   |   |   | 49,499 | (6) |
| Loss before interest and taxes                                                                                                                                                                                                                                 |   |   | 81,577    |   |       |   | (9,797 | )         |   |   | (71,908      | )(5)   |   |   | (128 | ) |
| Interest expense                                                                                                                                                                                                                                               |   |   |      |   |       |   |   |      |   |   | (9,803       | )      |   |   | (9,803 | ) |
| Income tax benefit                                                                                                                                                                                                                                             |   |   |      |   |       |   |   |      |   |   | (3,459       | )      |   |   | (3,459 | ) |
| Loss from continuing operations                                                                                                                                                                                                                                |   |   | 81,577    |   |       |   | (9,797 | )         |   |   | (78,252      | )      |   |   | (6,472 | ) |
| Capital expenditures                                                                                                                                                                                                                                           |   |   | 32,159    |   |       |   | 275    |      |   |   | 5,557        |   |   |   | 37,991 | (6) |
| ____________________                                                                                                                                                                                                                                           |   |   |      |   |       |   |   |      |   |   |         |   |   |   |   |   |
| (1)   Includes restructuring and other charges of $7,768 (see “Note 11. Restructuring and Other Charges” below) and a gain on repurchase of 1.125% Senior Convertible Notes of $7,313 (see “Note4. Long-term Debt” above).   |   |
| (2)   Includes restructuring and other charges of $14,945 (see “Note 11. Restructuring and Other Charges” below).                                                                                                                   |   |
| (3)   Excludes $111 of depreciation and amortization and $146 of capital expenditures related to our discontinued operations.                                                                                                                        |   |
| (4)   Includes restructuring and other charges of $16,473 (see “Note 11. Restructuring and Other Charges” below) and a gain on repurchase of 1.125% Senior Convertible Notes of $11,564 (see “Note4. Long-term Debt” above). |   |
| (5)   Includes restructuring and other charges of $18,556 (see “Note 11. Restructuring and Other Charges” below).                                                                                                                   |   |
| (6)   Excludes $850 of depreciation and amortization and $468 of capital expenditures related to our discontinued operations.                                                                                                                        |   |

----

|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   | Costs Incurred |   |   |        |   |   |      |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|----------------|--------|--------|-------------|--------|--------|-----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                             |   | Accrued    |   |   | for Twenty-six |   |   |        |   |   | Accrued   |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   | as of      |   |   | Weeks Ended    |   |   |        |   |   | as of     |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   | January 31 |   |   | August 1,      |   |   | Payments/   |   |   | August 1, |   |
| (In thousands)                                                                                                                                                                                                                                                                                                                                                                   |   | 2009(1)    |   |   | 2009           |   |   | Settlements |   |   | 2009(1)   |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |
| Fiscal 2007 Announcements                                                                                                                                                                                                                                                                                                                                                        |   |       |   |   |           |   |   |        |   |   |      |   |
| Relocation of CATHERINES operations:                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |
| Relocation and other charges                                                                                      |   | $          | 0      |   |           | $      | 172    |        |   | $      | 172       |   |   | $ | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Closing of under-performing and PETITE                                                                                                                                                                                                                                                                                                                                           |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| SOPHISTICATE full line stores:                                                                                                                                                                                                                                                                                                                                                   |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Store lease termination charges                                                                                   |   |       | 1,687  |   |           |   | 1,016  |        |   |   | 831       |   |   |   | 1,872 |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Fiscal 2008 Announcements                                                                                                                                                                                                                                                                                                                                                        |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Severance and retention costs(2)                                                         |   |       | 9,891  |   |           |   | 592    |        |   |   | 2,542     |   |   |   | 7,941 |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Non-core misses apparel assets:                                                                                                                                                                                                                                                                                                                                                  |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Other costs                                                                                                       |   |       | 420    |   |           |   | 1,062  |        |   |   | 125       |   |   |   | 1,357 |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Transformational initiatives:                                                                                                                                                                                                                                                                                                                                                    |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| Professional fees                                                                                                 |   |       | 1,379  |   |           |   | 5,869  |        |   |   | 5,700     |   |   |   | 1,548 |   |
| Severance and retention costs                                                                                                                                                                                                                                                                                                                                                    |   |       | 0      |   |           |   | 633    |        |   |   | 0         |   |   |   | 633 |   |
|                                                                                                                                                                                                                                                                                                                                                                             |   |       |   |   |           |   |   |        |   |   |      |   |   |   |   |   |
| figure magazine shutdown costs                                                                                                                                                                                                                                                                                                                                                   |   |       | 819    |   |           |   | 0      |        |   |   | 764       |   |   |   | 55 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                            |   | $          | 14,196 |   |           | $      | 9,344  |        |   | $      | 10,134    |   |   | $ | 13,406 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                             |   |
| (1)   Included in “Accrued expenses” in the accompanying consolidated balance sheets.                                                                                                                                                                                                                                                                      |   |
| (2)   Primarily severance for departure of former CEO, shutdown of LANE BRYANT WOMAN catalog, and the elimination of other positions.                                                                                                                                                                                                                                  |   |

----

|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   | Total       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|----------------|--------|--------|-----------|--------|--------|-------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                              |   | Costs       |   |   | Costs Incurred |   |   | Estimated |   |   | Estimated/  |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   | Incurred    |   |   | for Twenty-six |   |   | Remaining |   |   | Actual      |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   | As of       |   |   | Weeks Ended    |   |   | Costs     |   |   | Costs as of |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   | January 31, |   |   | August 1,      |   |   | to be     |   |   | August 1,   |   |
| (In thousands)                                                                                                                                                                                                                                                                                                                                                                    |   | 2009        |   |   | 2009           |   |   | Incurred  |   |   | 2009        |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |
| Fiscal 2007 Announcements                                                                                                                                                                                                                                                                                                                                                         |   |        |   |   |           |   |   |      |   |   |        |   |
| Relocation of CATHERINES operations:                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |
| Severance and retention costs                                                                                      |   | $           | 2,079  |   |           | $      | 0      |      |   | $      | 0           |   |   | $ | 2,079 |   |
| Non-cash write down and accelerated                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Depreciation                                                                                                       |   |        | 3,808  |   |           |   | 0      |      |   |   | 0           |   |   |   | 3,808 |   |
| Relocation and other charges                                                                                       |   |        | 1,166  |   |           |   | 172    |      |   |   | 0           |   |   |   | 1,338 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Closing of under-performing and PETITE                                                                                                                                                                                                                                                                                                                                            |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| SOPHISTICATE full line stores:                                                                                                                                                                                                                                                                                                                                                    |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Non-cash accelerated depreciation                                                                                                                                                                                                                                                                                                                                                 |   |        | 691    |   |           |   | 0      |      |   |   | 0           |   |   |   | 691 |   |
| Store lease termination charges                                                                                    |   |        | 6,909  |   |           |   | 1,016  |      |   |   | 0           |   |   |   | 7,925 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Severance and retention costs related to                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| the elimination of positions                                                              |   |        | 1,244  |   |           |   | 0      |      |   |   | 0           |   |   |   | 1,244 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Fiscal 2008 Announcements                                                                                                                                                                                                                                                                                                                                                         |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Severance for departure of former CEO                                                                                                                                                                                                                                                                                                                                             |   |        | 9,446  |   |           |   | 77     |      |   |   | 65          |   |   |   | 9,588 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Shutdown of LANE BRYANT WOMAN                                                                                                                                                                                                                                                                                                                                                     |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Catalog:                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Severance and retention costs                                                             |   |        | 1,557  |   |           |   | 367    |      |   |   | 176         |   |   |   | 2,100 |   |
| Non-cash accelerated depreciation                                                         |   |        | 934    |   |           |   | 936    |      |   |   | 0           |   |   |   | 1,870 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Severance and retention costs related to                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| the elimination of positions                                                              |   |        | 3,873  |   |           |   | 148    |      |   |   | 0           |   |   |   | 4,021 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Non-core misses apparel assets:                                                                                                                                                                                                                                                                                                                                                   |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Non-cash accelerated depreciation                                                         |   |        | 2,968  |   |           |   | 6,193  |      |   |   | 2,025       |   |   |   | 11,186 |   |
| Other costs                                                                               |   |        | 420    |   |           |   | 1,062  |      |   |   | 9,448       |   |   |   | 10,930 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Transformational initiatives:                                                                                                                                                                                                                                                                                                                                                     |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| Professional fees                                                                         |   |        | 2,563  |   |           |   | 5,869  |      |   |   | 863         |   |   |   | 9,295 |   |
| Severance and retention costs                                                             |   |        | 0      |   |           |   | 633    |      |   |   | 172         |   |   |   | 805 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |   |        |   |   |           |   |   |      |   |   |        |   |   |   |   |   |
| figure magazine shutdown costs                                                            |   |        | 819    |   |           |   | 0      |      |   |   | 0           |   |   |   | 819 |   |
| Total                                                                                     |   | $           | 38,477 |   |           | $      | 16,473 |      |   | $      | 12,749      |   |   | $ | 67,699 |   |

----

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

|                                                                                                                                                                                                                                  |   | Balance   |    |   |                   |   |   |       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|--------|------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                  |   | August 1, |    |   | Fair Value Method Used |   |
| (In thousands)                                                                                                                                                                                                                        |   | 2009      |    |   | Level 2                |   |   | Level 3(1) |   |
|                                                                                                                                                                                                                                  |   |      |    |   |                   |   |   |       |   |
| Assets                                                                                                                                                                                                                                |   |      |    |   |                   |   |   |       |   |
| Available-for-sale securities(2)                                                                                                                                                                                                 |   | $         | 400     |   |                   | $      | 400    |       |   |   |   |
| Certificates and retained interests in securitized receivables                                                                                                                                                                        |   |      | 100,358 |   |                   |   |   |       |   | $ | 100,358 |   |
|                                                                                                                                                                                                                                  |   |      |    |   |                   |   |   |       |   |   |   |   |
| Liabilities                                                                                                                                                                                                                           |   |      |    |   |                   |   |   |       |   |   |   |   |
| Servicing liability                                                                                                                                                                                                                   |   |      | 3,014   |   |                   |   |   |       |   |   | 3,014 |   |
| ____________________                                                                                                                                                                                                                  |   |
| (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, January 31, 2009                                      |   | $         | 94,453  |   |      | $      | 3,046 |   |
| Additions to I/O strip and servicing liability                 |   |      | 14,115  |   |      |   | 2,253 |   |
| Net additions to other retained interests                      |   |      | 7,014   |   |      |   | 0 |   |
| Reductions and maturities of QSPE certificates                 |   |      | (900    | )      |      |   | 0 |   |
| Amortization of the I/O strip and servicing liability          |   |      | (16,131 | )      |      |   | (2,356 | ) |
| Valuation adjustments to the I/O strip and servicing liability |   |      | 1,807   |   |      |   | 71 |   |
| Balance, August 1, 2009                                        |   | $         | 100,358 |   |      | $      | 3,014 |   |

|                                                                                                                                                       |   | August 1, 2009 |    |   | January 31, 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|------------------|--------|
|                                                                                                                                                       |   | Carrying       |    |   | Fair             |   |   | Carrying |   |   | Fair |   |
| (In thousands)                                                                                                                                             |   | Amount         |    |   | Value            |   |   | Amount |   |   | Value |   |
|                                                                                                                                                       |   |           |    |   |             |   |   |   |   |   |   |   |
| Assets:                                                                                                                                                    |   |           |    |   |             |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                                                                  |   | $              | 116,699 |   |             | $      | 116,699 |   |   | $ | 93,759 |   |   | $ | 93,759 |   |
| Available-for-sale securities                                                                                                                              |   |           | 400     |   |             |   | 400 |   |   |   | 6,398 |   |   |   | 6,398 |   |
| Investment in asset-backed securities                                                                                                                      |   |           | 100,358 |   |             |   | 100,358 |   |   |   | 94,453 |   |   |   | 94,453 |   |
|                                                                                                                                                       |   |           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                               |   |           |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| 1.125% Senior Convertible Notes, due 2014                                                                                                                  |   |           | 168,806 | (1)    |             |   | 147,355 |   |   |   | 202,087 | (1) |   |   | 75,295 |   |
| 6.07% mortgage note, due October 2014                                                                                                                      |   |           | 10,071  |   |             |   | 10,456 |   |   |   | 10,419 |   |   |   | 11,330 |   |
| 6.53% mortgage note, due November 2012                                                                                                                     |   |           | 4,550   |   |             |   | 4,668 |   |   |   | 5,250 |   |   |   | 5,493 |   |
| 7.77% mortgage note, due December 2011                                                                                                                     |   |           | 6,906   |   |             |   | 7,400 |   |   |   | 7,249 |   |   |   | 7,959 |   |
| Other long-term debt                                                                                                                                       |   |           | 294     |   |             |   | 311 |   |   |   | 422 |   |   |   | 414 |   |
| ____________________                                                                                                                                       |   |
| (1)   Net of unamortized discount of $54,459 at August 1, 2009 and $72,913 at January 31, 2009 (see “Note 4. Long-term Debt” above). |   |

----

----

----

----

----

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

FORWARD-LOOKING STATEMENTS

| ● | Our business is dependent upon our ability to accurately predict rapidly changing fashion trends, customer preferences, and other fashion-related factors, which we may not be able to successfully accomplish in the future. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                          |
| ● | The women’s specialty retail apparel and direct-to-consumer markets are highly competitive and we may be unable to compete successfully against existing or future competitors.                                         |
|    |                                                                                                                                                                                                                          |

----

| ● | We cannot assure the successful implementation of our business plan for increased profitability and growth in our Retail Stores or Direct-to-Consumer segments and we may be unable to successfully implement our plan to improve merchandise assortments.  Recent changes in management may fail to achieve improvement in our operatingresults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | A continuing slowdown in the United States economy, an uncertain economic outlook, and fluctuating energy costs could lead to reduced consumer demand for our products in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | Our inability to successfully manage labor costs, occupancy costs, or other operating costs, or our inability to take advantage of opportunities to reduce operating costs, could adversely affect our operating margins and our results of operations.  We cannot assure the successful implementation of our planned cost reduction andcapital budget reduction plans or the realization of our anticipated annualized expense savings from our restructuring programs.  We may be unable to obtain adequate insurance for our operations at a reasonable cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | We are subject to the Fair Labor Standards Act and various state and Federal laws and regulations governing such matters as minimum wages, exempt status classification, overtime, and employee benefits.  Changes in Federal or state laws or regulations regarding minimum wages, unionization, or other employee benefits could causeus to incur additional wage and benefit costs, which could adversely affect our results of operations.  Changes in legislation limiting interest rates and other credit card charges that can be billed on credit card accounts could negatively impact the operating margins of our credit operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | We depend on the availability of credit for our working capital needs, including credit we receive from our bankers, our factors, our suppliers and their agents, and on our credit card securitization facilities.  The current global financial crisis could adversely affect our ability or the ability of our vendors to secure adequatecredit financing.  If we or our vendors are unable to obtain sufficient financing at an affordable cost, our ability to merchandise our retail stores or e-commerce businesses could be adversely affected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | We cannot assure the successful consummation of the sale of our credit card operations.  We also cannot assure that we will realize the expected benefits from the sale of our credit card operations if the sale is consummated.  Should we fail to consummate the sale of our credit card operations, we would refinance ourmaturing credit card term securitization series through our credit conduit facilities, which are renewed annually, or through the issuance of a new term series.  To the extent that our conduit facilities could not be renewed they would amortize according to their terms and we would finance this amortization using our corporate cash flows or other sources of financing to the extent that they become available.  There is no assurance that we would be able to refinance or renew our conduit facilitieson terms comparable to our existing facilities or that there would be sufficient availability from other sources for such financing.  Should we fail to consummate the sale of our credit card operations and fail to refinance or renew our facilities, our ability to offer our credit program to our customers and consequently our financial condition and results of operations, would be adversely affected. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | Our Retail Stores and Direct-to-Consumer segments experience seasonal fluctuations in net sales and operating income.  Any decrease in sales or margins during our peak sales periods or in the availability of working capital during the months preceding such periods could have a material adverse effect on our business.  Inaddition, extreme or unseasonable weather conditions may have a negative impact on our sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

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

----

| ● | We continually evaluate our portfolio of businesses and may decide to acquire or divest businesses or enter into joint venture or strategic alliances.  If we fail to manage the risks associated with divestitures, joint ventures, or other alliances, our business, financial condition, and operating results could be materially andadversely affected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ● | 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 allmaterial respects, effective internal control over financial reporting.  If we are unable to maintain effective internal control over financial reporting we could be subject to regulatory sanctions and a possible loss of public confidence in the reliability of our financial reporting.  Such a failure could result in our inability to provide timely and/or reliable financial information and could adversely affect our business.                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ● | The holders of our 1.125% Senior Convertible Notes due May 1, 2014 (the 1.125% Notes) could require us to repurchase the principal amount of the notes for cash before maturity of the notes upon the occurrence of a “fundamental change” as defined in the prospectus filed in connection with the 1.125% Notes.  Such a repurchasewould require significant amounts of cash, would be subject to important limitations on our ability to repurchase, such as the risk of our inability to obtain funds for such repurchase, and could adversely affect our financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ● | Changes to existing accounting rules or the adoption of new rules could have an adverse impact on our reported results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ● | We make certain significant assumptions, estimates, and projections related to the useful lives and valuation of our property, plant, and equipment and the valuation of goodwill and other intangible assets related to acquisitions.  The carrying amount and/or useful life of these assets are subject to periodic and/or annual valuationtests 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 accelerationof depreciation or amortization of the assets, could result.  Such a write-down or acceleration of depreciation or amortization could have an adverse impact on our reported results of operations. |

CRITICAL ACCOUNTING POLICIES

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RECENT DEVELOPMENTS

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| ● | It will allow us to further focus on our core business;                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                            |
| ● | It will eliminate the financing risk associated with our credit card receivable securitization program and the credit risk of the underlying credit card portfolio;                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                            |
| ● | It will result in projected net cash proceeds to us of $110 million and the attendant strengthening of our liquidity and financial flexibility; and                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                            |
| ● | We will receive annual payments from Alliance Data based on credit sales generated by our private-label credit card portfolio, which are projected to substantially replace our net credit contribution related to our credit card business on a trailing twelve-month basis and are projected to result in the transaction being non-dilutive. |

| ● | We are working to improve our marketing.  We believe we can better succeed by focusing on the basics of efficiently driving traffic both to our stores and online, and by focusing on increasing the conversion rate for customers in our stores and on our websites. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                            |
| ● | We are focused on assortments planning and selling outfits.  We believe we can better succeed by improving our buying and in-store merchandising of appropriate assortments of bottoms, tops, accessories, intimates, and related products.                           |
|    |                                                                                                                                                                                                                                                                            |
| ● | We are working to complete the process of transforming into a vertical specialty store model, increasing the percentage of internally designed and developed fashion product and transforming each of our core brands into more independent, distinct brands.                   |

----

| ● | We are focused on increasing our e-commerce business across all of our brands.  As a first step in that process we have overhauled each of our core brands’ websites and moved to a new technology platform in advance of the Fiscal 2009 Third Quarter.  Our objective is to provide an improved on-line customer experiencethat results in increased sales conversion rates and increased e-commerce penetration.  We successfully converted our core brands to our new e-commerce platform in August 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ● | We are committed to adopting a multi-channel mindset.  We will encourage and make it easy for our customer to shop in three convenient ways – in our stores, online, and via telephone.  We will also be multi-vehicle in our communications with both existing and new customers, whether via direct mail, email, online,or in our stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ● | We are continuing to upgrade and enhance our organization.  We have expanded the functions within our Business Transformation office to include the important functions of global sourcing, distribution, logistics, quality control, and quality assurance.  We are also in the process of adding more global sourcing talentto this function through the creation of Retail Apparel Sourcing Leader positions for each of our brands.  These leaders will be charged with challenging our current buying processes and adopting consistent preferred best practices and policies, with the goal of increasing our product gross margins.  We also brought two brand internet leaders on board at our CATHERINES and FASHION BUG brands, with responsibility for developing online content and strategies, and driving the sales and profitabilityof their respective brand's direct-to-consumer business.  We have also made some changes to our brands’ finance teams to provide greater support to, and analytical tools for, our brands. |

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|                                                                                                                                                                                                                                                                                               |   |                    |    |   | Percentage |   |    |                      |   |   | Percentage |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|------------|--------|---------|---------------------------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                               |   | Thirteen Weeks Ended(1) |    |   | Change     |   |    | Twenty-six Weeks Ended(1) |   |   | Change     |   |
|                                                                                                                                                                                                                                                                                               |   | August 1,               |    |   | August 2,  |   |    | From Prior                |   |   | August 1,  |   |   | August 2, |   |   | From Prior |   |
|                                                                                                                                                                                                                                                                                               |   | 2009                    |    |   | 2008       |   |    | Period                    |   |   | 2009       |   |   | 2008 |   |   | Period |   |
|                                                                                                                                                                                                                                                                                               |   |                    |    |   |       |   |    |                      |   |   |       |   |   |   |   |   |   |   |
| Net sales                                                              |   |                    | 100.0   | %      |       |   | 100.0   | %                         |   |   | (18.7      | )%     |   |   | 100.0 | % |   |   | 100.0 | % |   |   | (17.4 | )% |
| Cost of goods sold                                                     |   |                    | 50.0    |   |       |   | 53.3    |                      |   |   | (23.8      | )      |   |   | 48.2 |   |   |   | 51.2 |   |   |   | (22.2 | ) |
| Gross profit                                                           |   |                    | 50.0    |   |       |   | 46.7    |                      |   |   | (12.9      | )      |   |   | 51.8 |   |   |   | 48.8 |   |   |   | (12.4 | ) |
| Occupancy and buying expenses                                                                                                                                                                                                                                                                      |   |                    | 19.0    |   |       |   | 16.3    |                      |   |   | (5.2       | )      |   |   | 19.0 |   |   |   | 16.5 |   |   |   | (4.6 | ) |
| Selling, general, and                                                                                                                                                                                                                                                                              |   |                    |    |   |       |   |    |                      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| administrative expenses                                                          |   |                    | 25.5    |   |       |   | 25.4    |                      |   |   | (18.4      | )      |   |   | 27.4 |   |   |   | 27.2 |   |   |   | (16.8 | ) |
| Depreciation and amortization                                                                                                                                                                                                                                                                      |   |                    | 3.6     |   |       |   | 3.5     |                      |   |   | (16.5      | )      |   |   | 3.7 |   |   |   | 3.8 |   |   |   | (20.7 | ) |
| Restructuring and other charges                                                                                                                                                                                                                                                                    |   |                    | 1.5     |   |       |   | 2.3     |                      |   |   | (48.0      | )      |   |   | 1.5 |   |   |   | 1.4 |   |   |   | (11.2 | ) |
| Income/(loss) from operations                                                                                                                                                                                                                                                                      |   |                    | 0.5     |   |       |   | (0.8    | )                         |   |   | 148.8      |   |   |   | 0.1 |   |   |   | (0.1 | ) |   |   | 188.2 |   |
| Other income                                                           |   |                    | 0.1     |   |       |   | 0.1     |                      |   |   | (64.3      | )      |   |   | 0.0 |   |   |   | 0.1 |   |   |   | (63.2 | ) |
| Gain on repurchase of debt                                             |   |                    | 1.4     |   |       |   | – |                      |   |   | –    |   |   |   | 1.1 |   |   |   | – |   |   |   | – |   |
| Interest expense                                                       |   |                    | 0.9     |   |       |   | 0.7     |                      |   |   | (7.4       | )      |   |   | 0.9 |   |   |   | 0.7 |   |   |   | (3.0 | ) |
| Income tax (benefit)/provision                                                                                                                                                                                                                                                                     |   |                    | 0.1     |   |       |   | (0.6    | )                         |   |   | (117.9     | )      |   |   | 0.5 |   |   |   | (0.3 | ) |   |   | (255.7 | ) |
| Income/(loss) from                                                                                                                                                                                                                                                                                 |   |                    |    |   |       |   |    |                      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| continuing operations                                                            |   |                    | 0.9     |   |       |   | (0.9    | )                         |   |   | 190.2      |   |   |   | (0.1 | ) |   |   | (0.5 | ) |   |   | 75.6 |   |
| Loss from discontinued operations,                                                                                                                                                                                                                                                                 |   |                    |    |   |       |   |    |                      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net of tax                                                                       |   |                    | – |   |       |   | (0.8    | )                         |   |   | –    |   |   |   | – |   |   |   | (4.0 | ) |   |   | – |   |
| Net income/(loss)                                                      |   |                    | 0.9     |   |       |   | (1.6    | )                         |   |   | 146.7      |   |   |   | (0.1 | ) |   |   | (4.5 | ) |   |   | 97.3 |   |
| ____________________                                                                                                                                                                                                                                                                               |   |
| (1)   Results may not add due to rounding.                                                                                                                                                                                                                                               |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Thirteen Weeks Ended |   |   | Twenty-six Weeks Ended |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | August 1,            |   |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2009                 |   |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Retail Stores segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Increase (decrease) in comparable store sales(1) :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Consolidated retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | (14    | )%     |                   |   | (10 | )% |   |   | (14 | )% |   |   | (11 | )% |
| LANE BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (13    | )      |                   |   | (11 | ) |   |   | (14 | ) |   |   | (11 | ) |
| FASHION BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 | (18    | )      |                   |   | (9 | ) |   |   | (16 | ) |   |   | (11 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | (9     | )      |                   |   | (12 | ) |   |   | (9 | ) |   |   | (14 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Sales from new stores as a percentage of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| consolidated prior-period sales(2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| LANE BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | 2      |   |                   |   | 4 |   |   |   | 2 |   |   |   | 2 |   |
| FASHION BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 | 0      |   |                   |   | 1 |   |   |   | 0 |   |   |   | 0 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | 0      |   |                   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| Other retail stores(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                 | 0      |   |                   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Prior-period sales from closed stores as a percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| of total consolidated prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| LANE BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                 | (2     | )      |                   |   | (3 | ) |   |   | (2 | ) |   |   | (3 | ) |
| FASHION BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                 | (3     | )      |                   |   | (2 | ) |   |   | (3 | ) |   |   | (2 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 | (0     | )      |                   |   | (0 | ) |   |   | (0 | ) |   |   | (0 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                 | (17    | )      |                   |   | (9 | ) |   |   | (16 | ) |   |   | (10 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Direct-to-Consumer segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Increase/(decrease) in Direct-to-Consumer segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| sales(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 | (72    | )      |                   |   | 340 |   |   |   | (48 | ) |   |   | 221 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                 |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease in consolidated total net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                 | (19    | )      |                   |   | (7 | ) |   |   | (17 | ) |   |   | (7 | ) |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| (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 comparableto 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 outsidethe 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 comparablestore 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 LANE BRYANT WOMAN catalog which began operations in the Fiscal 2007 Fourth Quarter. During the Fiscal 2008 Third Quarter we announced our decision to discontinue the LANE BRYANT WOMAN catalog, which we completed during the Fiscal 2009 Second Quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |

----

|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   | Income/(Loss)   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------------|--------|--------|-----------------|--------|
|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   | From Continuing |   |
|                                                                                                                                                                                                                                                                                             |   |   |    |   | Depreciation |   |   | Operations      |   |
|                                                                                                                                                                                                                                                                                             |   | Net    |    |   | and          |   |   | Before Interest |   |
| (In millions)                                                                                                                                                                                                                                                                                    |   | Sales  |    |   | Amortization |   |   | And Taxes       |   |
|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   |            |   |
| Thirteen weeks ended August 1, 2009                                                                                                                                                                                                                                                              |   |   |    |   |         |   |   |            |   |
| LANE BRYANT(1)                                                                                                                                                                                                                                                                              |   | $      | 246.9   |   |         | $      | 7.9    |            |   | $ | 12.3 |   |
| FASHION BUG                                                                                                                                                                                                                                                                                      |   |   | 189.4   |   |         |   | 2.9    |            |   |   | 6.6 |   |
| CATHERINES                                                                                                                                                                                                                                                                                       |   |   | 77.1    |   |         |   | 1.8    |            |   |   | 6.1 |   |
| Other retail stores(2)                                                                                                                                                                                                                                                                      |   |   | 4.8     |   |         |   | 0.1    |            |   |   | 0.0 |   |
| Total Retail Stores segment                                                                                                                                                                                                                                                                      |   |   | 518.2   |   |         |   | 12.7   |            |   |   | 25.0 |   |
| Total Direct-to-Consumer segment                                                                                                                                                                                                                                                                 |   |   | 6.3     |   |         |   | 0.2    |            |   |   | (3.8 | ) |
| Corporate and other                                                                                                                                                                                                                                                                              |   |   | 2.7     | (3)    |         |   | 6.3    |            |   |   | (11.1 | )(4)(5) |
| Total consolidated                                                                                                                                                                                                                                                                               |   | $      | 527.2   |   |         | $      | 19.2   |            |   | $ | 10.1 |   |
|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   |            |   |   |   |   |
| Thirteen weeks ended August 2, 2008                                                                                                                                                                                                                                                              |   |   |    |   |         |   |   |            |   |   |   |   |
| LANE BRYANT(1)                                                                                                                                                                                                                                                                              |   | $      | 285.4   |   |         | $      | 8.5    |            |   | $ | 12.5 |   |
| FASHION BUG                                                                                                                                                                                                                                                                                      |   |   | 246.9   |   |         |   | 4.2    |            |   |   | 19.6 |   |
| CATHERINES                                                                                                                                                                                                                                                                                       |   |   | 83.6    |   |         |   | 1.9    |            |   |   | 5.7 |   |
| Other retail stores(2)                                                                                                                                                                                                                                                                      |   |   | 6.9     |   |         |   | 0.0    |            |   |   | 0.4 |   |
| Total Retail Stores segment                                                                                                                                                                                                                                                                      |   |   | 622.8   |   |         |   | 14.6   |            |   |   | 38.2 |   |
| Total Direct-to-Consumer segment                                                                                                                                                                                                                                                                 |   |   | 22.5    |   |         |   | 0.2    |            |   |   | (5.6 | ) |
| Corporate and other                                                                                                                                                                                                                                                                              |   |   | 3.3     | (3)    |         |   | 8.2    |            |   |   | (37.0 | )(4) |
| Total consolidated                                                                                                                                                                                                                                                                               |   | $      | 648.6   |   |         | $      | 23.0   |            |   | $ | (4.4 | ) |
|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   |            |   |   |   |   |
| Twenty-six weeks ended August 1, 2009                                                                                                                                                                                                                                                            |   |   |    |   |         |   |   |            |   |   |   |   |
| LANE BRYANT(1)                                                                                                                                                                                                                                                                              |   | $      | 500.7   |   |         | $      | 16.1   |            |   | $ | 43.1 |   |
| FASHION BUG                                                                                                                                                                                                                                                                                      |   |   | 368.1   |   |         |   | 5.9    |            |   |   | 6.4 |   |
| CATHERINES                                                                                                                                                                                                                                                                                       |   |   | 155.9   |   |         |   | 3.4    |            |   |   | 13.8 |   |
| Other retail stores(2)                                                                                                                                                                                                                                                                      |   |   | 9.1     |   |         |   | 0.1    |            |   |   | 0.2 |   |
| Total Retail Stores segment                                                                                                                                                                                                                                                                      |   |   | 1,033.8 |   |         |   | 25.5   |            |   |   | 63.5 |   |
| Total Direct-to-Consumer segment                                                                                                                                                                                                                                                                 |   |   | 25.8    |   |         |   | 0.4    |            |   |   | (7.2 | ) |
| Corporate and other                                                                                                                                                                                                                                                                              |   |   | 5.7     | (3)    |         |   | 13.3   |            |   |   | (43.0 | )(4)(5) |
| Total consolidated                                                                                                                                                                                                                                                                               |   | $      | 1,065.3 |   |         | $      | 39.2   |            |   | $ | 13.3 |   |
|                                                                                                                                                                                                                                                                                             |   |   |    |   |         |   |   |            |   |   |   |   |
| Twenty-six weeks ended August 2, 2008                                                                                                                                                                                                                                                            |   |   |    |   |         |   |   |            |   |   |   |   |
| LANE BRYANT(1)                                                                                                                                                                                                                                                                              |   | $      | 582.4   |   |         | $      | 16.6   |            |   | $ | 42.2 |   |
| FASHION BUG                                                                                                                                                                                                                                                                                      |   |   | 468.8   |   |         |   | 9.4    |            |   |   | 26.7 |   |
| CATHERINES                                                                                                                                                                                                                                                                                       |   |   | 170.0   |   |         |   | 2.4    |            |   |   | 12.9 |   |
| Other retail stores(2)                                                                                                                                                                                                                                                                      |   |   | 12.9    |   |         |   | 0.1    |            |   |   | (0.2 | ) |
| Total Retail Stores segment                                                                                                                                                                                                                                                                      |   |   | 1,234.1 |   |         |   | 28.5   |            |   |   | 81.6 |   |
| Total Direct-to-Consumer segment                                                                                                                                                                                                                                                                 |   |   | 49.5    |   |         |   | 0.4    |            |   |   | (9.8 | ) |
| Corporate and other                                                                                                                                                                                                                                                                              |   |   | 6.4     | (3)    |         |   | 20.6   |            |   |   | (71.9 | )(4) |
| Total consolidated                                                                                                                                                                                                                                                                               |   | $      | 1,290.0 |   |         | $      | 49.5   |            |   | $ | (0.1 | ) |
| ____________________                                                                                                                                                                                                                                                                             |   |
| (1)   Includes LANE BRYANT OUTLET stores.                                                                                                                                                                                                                                              |   |
| (2)   Includes PETITE SOPHISTICATE stores, which began operations in October 2007 and were closed in August 2008, and PETITE SOPHISTICATE OUTLET stores, which began operations in September 2006.                                                                                     |   |
| (3)   Primarily revenue related to loyalty card fees.                                                                                                                                                                                                                                  |   |
| (4)   Includes restructuring and other charges of $7.8 million and $16.5 million for the thirteen and twenty-six week periods ended August 1, 2009, respectively, and $15.0 million and $18.6 million for the thirteen and twenty-six week periods ended August 2, 2008, respectively. |   |
| (5)   Includes gain on repurchase of 1.125% Senior Convertible Notes of $7.3 million and $11.6 for the thirteen and twenty-six week periods ended August 1, 2009, respectively.                                                                                                        |   |

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|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   | PETITE       |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|------------|--------|--------|--------------|--------|--------|--------|--------|
|                                                                                                                                                           |   | LANE   |   |   | FASHION |   |   |       |   |   | SOPHISTICATE |   |   |   |   |
|                                                                                                                                                           |   | BRYANT |   |   | BUG     |   |   | CATHERINES |   |   | OUTLET       |   |   | Total  |   |
|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |
| Fiscal 2009 Year-to-Date:                                                                                                                                      |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |
| Stores at January 31, 2009                                                                                                                                     |   |   | 892    |   |    |   | 897    |       |   |   | 463          |   |   |   | 49     |   |   |   | 2,301 |   |
|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Stores opened                                                                                                                                                  |   |   | 5      |   |    |   | 0      |       |   |   | 3            |   |   |   | 0      |   |   |   | 8 |   |
| Stores closed(1)                                                                                                                                               |   |   | (16    | )      |    |   | (29    | )          |   |   | (1           | )      |   |   | (5     | ) |   |   | (51 | ) |
| Net change in stores                                                                                                                                           |   |   | (11    | )      |    |   | (29    | )          |   |   | 2            |   |   |   | (5     | ) |   |   | (43 | ) |
|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Stores at August 1, 2009                                                                                                                                       |   |   | 881    |   |    |   | 868    |       |   |   | 465          |   |   |   | 44     |   |   |   | 2,258 |   |
|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Stores relocated during period                                                                                                                                 |   |   | 5      |   |    |   | 1      |       |   |   | 0            |   |   |   | 0      |   |   |   | 6 |   |
|                                                                                                                                                           |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Fiscal 2009:                                                                                                                                                   |   |   |   |   |    |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Planned store openings                                                                                                                                         |   |   | 6      |   |    |   | 0      |       |   |   | 5            |   |   |   | 0      |   |   |   | 11 |   |
| Planned store closings                                                                                                                                         |   |   | 40     |   |    |   | 85     |       |   |   | 10           |   |   |   | 15     |   |   |   | 150 |   |
| Planned store relocations                                                                                                                                      |   |   | 8      |   |    |   | 2      |       |   |   | 0            |   |   |   | 0      |   |   |   | 10 |   |
| ____________________                                                                                                                                           |   |
| (1)   Includes 11 FASHION BUG and 5 LANE BRYANT stores closed as part of the store closing initiatives announced in February 2008 and November 2008. |   |

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----

----

| ● | $3.9 million for costs related to our multi-year business transformation initiatives.                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                         |
| ● | $3.3 million for accelerated depreciation related to fixed assets retained from the sale of the non-core misses apparel catalog business and our decision to outsource the development and hosting of our new e-commerce platform.  These fixed assets will be fully depreciated by the Fiscal 2009 Third Quarter. |
|    |                                                                                                                                                                                                                                                                                                                         |
| ● | $0.6 million for lease termination costs related to the closing of under-performing stores and other costs.                                                                                                                                                                                                                  |

----

----

----

| ● | $8.0 million for costs related to our multi-year business transformation initiatives.                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                         |
| ● | $6.2 million for accelerated depreciation related to fixed assets retained from the sale of the non-core misses apparel catalog business and our decision to outsource the development and hosting of our new e-commerce platform.  These fixed assets will be fully depreciated by the Fiscal 2009 Third Quarter. |
|    |                                                                                                                                                                                                                                                                                                                         |
| ● | $1.3 million for retention and accelerated depreciation for the planned shutdown of the LANE BRYANT WOMAN catalog operations, which we completed during the Fiscal 2009 Second Quarter.                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                         |
| ● | $1.0 million for lease termination costs related to the closing of under-performing stores and other costs.                                                                                                                                                                                                                  |

----

----

|                           |   | August 1, |   |   | January 31, |   |
|--------------------------------|--------|-----------|--------|--------|-------------|--------|
| (Dollars in millions)          |   | 2009      |   |   | 2009        |   |
|                           |   |      |   |   |        |   |
| Cash and cash equivalents      |   | $         | 116.7  |   |        | $      | 93.8 |   |
| Available-for-sale securities  |   | $         | 0.4    |   |        | $      | 6.4 |   |
| Working capital                |   | $         | 377.4  |   |        | $      | 382.0 |   |
| Current ratio                  |   |      | 2.4    |   |        |   | 2.4 |   |
| Long-term debt to equity ratio |   |      | 36.5   | %      |        |   | 43.3 | % |

----

----

| (Dollars in millions)                                                                                                                                                                                                                                                                                                                                    | Series 1999-2     |   | Series 2004-VFC   |   | Series 2004-1  |   | Series 2007-1  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|-------------------|--------|----------------|--------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                     |              |   |              |   |           |   |           |   |
| Date of facility                                                                                                                                                                                                                                                                                                                                         | May 1999          |   | January 2004      |   | August 2004    |   | October 2007   |   |
| Type of facility                                                                                                                                                                                                                                                                                                                                         | Conduit           |   | Conduit           |   | Term           |   | Term           |   |
| Maximum funding                                                                                                                                                                                                                                                                                                                                          | $50.0             |   | $105.0            |   | $180.0         |   | $320.0         |   |
| Funding as of August 1, 2009                                                                                                                                                                                                                                                                                                                             | $5.0              |   | $47.5             |   | $122.4         |   | $320.0         |   |
| First scheduled principal payment                                                                                                                                                                                                                                                                                                                        | Not applicable    |   | Not applicable    |   | April 2009     |   | April 2012     |   |
| Expected final principal payment                                                                                                                                                                                                                                                                                                                         | Not applicable(1) |   | Not applicable(1) |   | March 2010     |   | March 2013     |   |
| Next renewal date                                                                                                                                                                                                                                                                                                                                        | March 2010        |   | January 2010      |   | Not applicable |   | Not applicable |   |
| ____________________                                                                                                                                                                                                                                                                                                                                     |
| (1)   Series 1999-2 and Series 2004-VFC have scheduled final payment dates that occur in the twelfth month following the month in which the series begins amortizing.  These series begin amortizing on the next renewal date subject to the further extension of the renewal date as a result of renewalof the purchase commitment. |

----

----

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|                                                                                                      |   | Thirteen Weeks Ended |   |   | Twenty-six Weeks Ended |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------|--------|
|                                                                                                      |   | August 1,            |   |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
| (In millions)                                                                                             |   | 2009                 |   |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                                                                                      |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Net securitization excess spread revenues                                                                 |   | $                    | 23.2   |   |                   | $      | 26.3 |   |   | $ | 40.0 |   |   | $ | 49.6 |   |
| Net changes to the I/O strip and servicing liability                                                      |   |                 | 1.0    |   |                   |   | (0.3 | ) |   |   | (0.2 | ) |   |   | 0.1 |   |
| Other credit card revenues, net(1)                                                                   |   |                 | 2.8    |   |                   |   | 2.5 |   |   |   | 6.1 |   |   |   | 5.8 |   |
| Total credit card revenues                                                                                |   |                 | 27.0   |   |                   |   | 28.5 |   |   |   | 45.9 |   |   |   | 55.5 |   |
| Less total credit card program expenses                                                                   |   |                 | 14.0   |   |                   |   | 17.0 |   |   |   | 28.9 |   |   |   | 35.0 |   |
| Total credit contribution                                                                                 |   | $                    | 13.0   |   |                   | $      | 11.5 |   |   | $ | 17.0 |   |   | $ | 20.5 |   |
| ____________________                                                                                      |   |
| (1)   Excludes inter-company merchant fees between our credit entities and our retail entities. |   |

|                                    |   | Thirteen Weeks Ended |   |   | Twenty-six Weeks Ended |   |
|-----------------------------------------|--------|----------------------|--------|--------|------------------------|--------|
|                                    |   | August 1,            |   |   | August 2,              |   |   | August 1, |   |   | August 2, |   |
| (In millions)                           |   | 2009                 |   |   | 2008                   |   |   | 2009 |   |   | 2008 |   |
|                                    |   |                 |   |   |                   |   |   |   |   |   |   |   |
| Average managed receivables outstanding |   | $                    | 501.3  |   |                   | $      | 591.9 |   |   | $ | 502.8 |   |   | $ | 588.6 |   |
| Ending managed receivables outstanding  |   | $                    | 495.2  |   |                   | $      | 584.9 |   |   | $ | 495.2 |   |   | $ | 584.9 |   |

----

----

----

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      |   |   |       |   |   | 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) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      |   |   |       |   |   |             |   |   |        |   |
| May 3, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |      |   |   |       |   |   |             |   |   |        |   |
| May 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |      | 1,077  | (1)    |       | $      | 3.32   |             |   |   | –     |   |   |   |   |
| May 31, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      |   |   |       |   |   |             |   |   |        |   |   |   |   |
| July 4, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |      | 2,875  | (1)    |       |   | 3.78   |             |   |   | –     |   |   |   |   |
| July 5, 2009 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      |   |   |       |   |   |             |   |   |        |   |   |   |   |
| August 1, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      | 2,194  |   |       |   | 4.18   |             |   |   | –     |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |      | 6,146  |   |       | $      | 3.84   |             |   |   | –     |   |   |   |   | (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. Duringthe period from February 3, 2008 through May 3, 2008 we repurchased a total of 505,406 shares of stock ($5.21 average price paid per share) in the open market under this program. No shares have been purchased under this plan subsequent to May 3, 2008. As of August 1, 2009, $197,364,592 was available for future repurchases under this program. This repurchase program has no expiration date. |   |

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| Name                                                                                                                                                                                                                    |   | Votes For         |   |   | Votes Withheld   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|------------------|--------|
| Arnaud Ajdler                                      |   | 107,240,006       |   |   |   3,324,553 |   |
| Michael C. Appel                                   |   | 107,313,372       |   |   |   3,251,187 |   |
| Richard W. Bennet III                                                                                                                                                                                                   |   | 107,333,007       |   |   |   3,231,552 |   |
| Yvonne M. Curl                                     |   | 107,241,528       |   |   |   3,323,031 |   |
| James P. Fogarty                                   |   | 107,340,856       |   |   |   3,223,703 |   |
| Michael Goldstein                                  |   |   97,734,923 |   |   | 12,829,636       |   |
| Katherine M. Hudson                                                                                                                                                                                                     |   | 107,270,800       |   |   |   3,293,759 |   |
| Alan Rosskamm                                      |   | 107,305,727       |   |   |   3,258,832 |   |
| M. Jeannine Strandjord                                                                                                                                                                                                  |   | 107,162,206       |   |   |   3,402,353 |   |

| 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 ofthe Registrant dated June 2, 2005, filed on June 8, 2005 (File No. 000-07258, Exhibit 2.1). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.2    | Stock Purchase Agreement dated as of August 25, 2008 by and between Crosstown Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and the other persons listed on the signature page thereto, incorporated by reference to Form 8-K of the Registrant dated August 25, 2008, filed on August 28, 2008 (File No. 000-07258, Exhibit10.1).                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.3    | Amendment No. 1 to Stock Purchase Agreement dated as of September 18, 2008 by and among Crosstown Traders, Inc. and Norm Thompson Outfitters, Inc., incorporated by reference to Form 8-K of the Registrant dated September 18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit 10.2).                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 2.4    | Transition Services Agreement dated as of September 18, 2008 by and between Charming Shoppes of Delaware, Inc. and Arizona Mail Order Company, incorporated by reference to Form 8-K of the Registrant dated September 18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit 10.3).                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.1    | Restated Articles of Incorporation, incorporated by reference to Form 10-Q of the Registrant for the quarter ended August 2, 2008 (File No. 000-07258, Exhibit 3.1).                                                                                                                                                                                                                                                                        |

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| 3.2    | Bylaws, as Amended and Restated, incorporated by reference to Form 10-K of the Registrant for the fiscal year ended January 31, 2009 (File No. 000-07258, Exhibit 3.2).                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.1    | Third Amended and Restated Loan and Security Agreement, dated July 31, 2009, by and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc., CSI Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation, and Lane Bryant, Inc. as borrowers; a syndicate of banks and other financial institutions as lenders, including WellsFargo Retail Finance, LLC as agent for the lenders; and certain of the Company’s subsidiaries as guarantors, incorporated by reference to Form 8-K of the Registrant dated July 31, 2009, filed on August 6, 2009 (File No. 000-07258, Exhibit 4.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1   | Offer Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty, incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.1).                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2   | Severance Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty, incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.2).                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3   | Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty (Inducement Grant), incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.3).                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.4   | Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty (Time-Based Grant), incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.4).                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5   | Form of Amendment to the Severance Agreements between certain executive vice presidents and the Company, including the following named executive officers: Eric M. Specter, Joseph M. Baron, James G. Bloise and Colin D. Stern, incorporated by reference to Form 8-K of the Registrant dated May 1, 2009, filed on May 5, 2009 (File No. 000-07258,Exhibit 10.1).                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.6   | Purchase Agreement dated as of August 12, 2009 among SOANB and CSRC, as sellers, SOAI, and WFNNB, as purchaser, incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.1).                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.7   | Private Label Credit Card Plan Agreement for Lane Bryant and Petite Sophisticate dated as of August 12, 2009 between WFNNB and Lane Bryant, Inc., Petite Sophisticate, Inc., Outlet Division Management Co., Inc., and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August14, 2009 (File No. 000-07258, Exhibit 10.2).                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.8   | Private Label Credit Card Plan Agreement for Fashion Bug dated as of August 12, 2009 between WFNNB and Fashion Bug Retail Companies, Inc. and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.3).                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.9   | Private Label Credit Card Plan Agreement for Catherines dated as of August 12, 2009 among WFNNB, Catherines Stores Corporation, and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.4).                                                                                                                                                                                                                                                                                               |

----

| 10.10  | Agreement Regarding CHRS Subsidiary Private Label Plans dated as of August 12, 2009 between CSI and WFNNB, incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.5).   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                     |
| 10.11  | Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan, incorporated by reference to Appendix A of the Registrant’s Proxy Statement pursuant to Section 14 of the Securities Exchange Act of 1934, filed on May 15, 2009 (File No. 000-07258). |
|   |                                                                                                                                                                                                                                                     |
| 10.12  | 2003 Non-Employee Directors Compensation Plan, Amended and Restated Effective May 1, 2009.                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                     |
| 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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|                    | CHARMING SHOPPES, INC.   |
|-------------------------|--------------------------|
|                    | (Registrant)             |
|                    |                     |
|                    |                     |
|                    |                     |
| Date: September 2, 2009 | /S/ JAMES P. FOGARTY     |
|                    | James P. Fogarty         |
|                    | President                |
|                    | Chief Executive Officer  |
|                    |                     |
|                    |                     |
|                    |                     |
| Date: September 2, 2009 | /S/ ERIC M. SPECTER      |
|                    | Eric M. Specter          |
|                    | Executive Vice President |
|                    | Chief Financial Officer  |

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| 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 ofthe Registrant dated June 2, 2005, filed on June 8, 2005 (File No. 000-07258, Exhibit 2.1).                                                                                                                                                                  |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.2         | Stock Purchase Agreement dated as of August 25, 2008 by and between Crosstown Traders, Inc., Norm Thompson Outfitters, Inc., Charming Shoppes, Inc. and the other persons listed on the signature page thereto, incorporated by reference to Form 8-K of the Registrant dated August 25, 2008, filed on August 28, 2008 (File No. 000-07258, Exhibit10.1).                                                                                                                                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.3         | Amendment No. 1 to Stock Purchase Agreement dated as of September 18, 2008 by and among Crosstown Traders, Inc. and Norm Thompson Outfitters, Inc., incorporated by reference to Form 8-K of the Registrant dated September 18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit 10.2).                                                                                                                                                                                                                                                                                                        |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.4         | Transition Services Agreement dated as of September 18, 2008 by and between Charming Shoppes of Delaware, Inc. and Arizona Mail Order Company, incorporated by reference to Form 8-K of the Registrant dated September 18, 2008, filed on September 19, 2008 (File No. 000-07258, Exhibit 10.3).                                                                                                                                                                                                                                                                                                             |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.1         | Restated Articles of Incorporation, incorporated by reference to Form 10-Q of the Registrant for the quarter ended August 2, 2008 (File No. 000-07258, Exhibit 3.1).                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2         | Bylaws, as Amended and Restated, incorporated by reference to Form 10-K of the Registrant for the fiscal year ended January 31, 2009 (File No. 000-07258, Exhibit 3.2).                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.1         | Third Amended and Restated Loan and Security Agreement, dated July 31, 2009, by and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc., CSI Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation, and Lane Bryant, Inc. as borrowers; a syndicate of banks and other financial institutions as lenders, including WellsFargo Retail Finance, LLC as agent for the lenders; and certain of the Company’s subsidiaries as guarantors, incorporated by reference to Form 8-K of the Registrant dated July 31, 2009, filed on August 6, 2009 (File No. 000-07258, Exhibit 4.1). |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1        | Offer Letter dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty, incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.1).                                                                                                                                                                                                                                                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2        | Severance Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty, incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.2).                                                                                                                                                                                                                                                                                                                                                            |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3        | Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty (Inducement Grant), incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.3).                                                                                                                                                                                                                                                                                                                         |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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| 10.4   | Stock Appreciation Rights Agreement dated as of April 2, 2009 by and between Charming Shoppes, Inc. and James P. Fogarty (Time-Based Grant), incorporated by reference to Form 8-K of the Registrant dated April 2, 2009, filed on April 7, 2009 (File No. 000-07258, Exhibit 10.4).                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.5   | Form of Amendment to the Severance Agreements between certain executive vice presidents and the Company, including the following named executive officers: Eric M. Specter, Joseph M. Baron, James G. Bloise and Colin D. Stern, incorporated by reference to Form 8-K of the Registrant dated May 1, 2009, filed on May 5, 2009 (File No. 000-07258,Exhibit 10.1).                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.6   | Purchase Agreement dated as of August 12, 2009 among SOANB and CSRC, as sellers, SOAI, and WFNNB, as purchaser, incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.1).                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.7   | Private Label Credit Card Plan Agreement for Lane Bryant and Petite Sophisticate dated as of August 12, 2009 between WFNNB and Lane Bryant, Inc., Petite Sophisticate, Inc., Outlet Division Management Co., Inc., and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August14, 2009 (File No. 000-07258, Exhibit 10.2). |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.8   | Private Label Credit Card Plan Agreement for Fashion Bug dated as of August 12, 2009 between WFNNB and Fashion Bug Retail Companies, Inc. and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.3).                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.9   | Private Label Credit Card Plan Agreement for Catherines dated as of August 12, 2009 among WFNNB, Catherines Stores Corporation, and Sierra Nevada Factoring, Inc., incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.4).                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.10  | Agreement Regarding CHRS Subsidiary Private Label Plans dated as of August 12, 2009 between CSI and WFNNB, incorporated by reference to Form 8-K of the Registrant dated August 12, 2009, filed on August 14, 2009 (File No. 000-07258, Exhibit 10.5).                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.11  | Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan, incorporated by reference to Appendix A of the Registrant’s Proxy Statement pursuant to Section 14 of the Securities Exchange Act of 1934, filed on May 15, 2009 (File No. 000-07258).                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.12  | 2003 Non-Employee Directors Compensation Plan, Amended and Restated Effective May 1, 2009.                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                             |
| 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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