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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

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

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**Or**

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

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**Commission      File No. 000-07258**

**CHARMING      SHOPPES, INC.**

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

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

**NOT      APPLICABLE**

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

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**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**TABLE      OF CONTENTS**

|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **Page** |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **PART                I.**  | **FINANCIAL                INFORMATION                                                                                                                     ** | 2        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                1.**  | **Financial                Statements (Unaudited)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Condensed                Consolidated Balance Sheets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | May                5, 2007 and February 3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Condensed                Consolidated Statements of Operations and Comprehensive                Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     |
|                        | Thirteen                weeks ended May 5, 2007 and April 29, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Condensed                Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |     |
|                        | Thirteen                weeks ended May 5, 2007 and April 29, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 4        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Notes                to Condensed Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 5        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                2.**  | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 19       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Forward-looking                Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 19       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Critical                Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 21       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Recent                Developments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 24       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Results                of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 25       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Liquidity                and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 29       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 33       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Market                Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 35       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | Impact                of Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 36       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                3.**  | **Quantitative                and Qualitative Disclosures About Market Risk**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 36       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                4.**  | **Controls                and Procedures**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 36       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **PART                II.** | **OTHER                INFORMATION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 37       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                1.**  | **Legal                Proceedings**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 37       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                1A.** | **Risk                Factors**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 37       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                2.**  | **Unregistered                Sales of Equity Securities and Use of Proceeds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 38       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
| **Item                6.**  | **Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 39       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | **SIGNATURES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 41       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     |
|                        | **Exhibit                Index**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 42       |

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**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                         |   | **May                5,** |          |   | **February                3,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------------|--------|--------------------------------|--------|
| ***(In                thousands, except share amounts)***                                                                    |   | **2007**                  |          |   | **2007**                       |   |
|                                                                                                                         |   | **(Unaudited)**           |          |   |                           |   |
| **ASSETS**                                                                                                                   |   |                      |          |   |                           |   |
| **Current                assets**                                                                                            |   |                      |          |   |                           |   |
| Cash                and cash equivalents                                                                                     |   | **$**                     | **240,913**   |   |                           | $      | 143,838 |   |
| Available-for-sale                securities                                                                                 |   | ** **                | **300**       |   |                           |   | 1,997 |   |
| Accounts                receivable, net of allowances of $5,627 and $5,083                                                   |   | ** **                | **6,831**     |   |                           |   | 33,366 |   |
| Investment                in asset-backed securities                                                                         |   | ** **                | **61,564**    |   |                           |   | 60,643 |   |
| Merchandise                inventories                                                                                       |   | ** **                | **469,508**   |   |                           |   | 429,433 |   |
| Deferred                advertising                                                                                          |   | ** **                | **20,701**    |   |                           |   | 21,707 |   |
| Deferred                taxes                                                                                                |   | ** **                | **5,573**     |   |                           |   | 4,469 |   |
| Prepayments                and other                                                                                         |   | ** **                | **139,010**   |   |                           |   | 145,385 |   |
| **Total                current assets**                                                                                      |   | ** **                | **944,400**   |   |                           |   | 840,838 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| Property,                equipment, and leasehold improvements – at cost                                               |   | ** **                | **1,026,396** |   |                           |   | 996,430 |   |
| Less                accumulated depreciation and amortization                                                                |   | ** **                | **592,835**   |   |                           |   | 573,984 |   |
| **Net                property, equipment, and leasehold improvements**                                                       |   | ** **                | **433,561**   |   |                           |   | 422,446 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| Trademarks                and other intangible assets                                                                        |   | ** **                | **248,809**   |   |                           |   | 249,490 |   |
| Goodwill                                                                                                                     |   | ** **                | **153,370**   |   |                           |   | 153,370 |   |
| Other                assets                                                                                                  |   | ** **                | **54,789**    |   |                           |   | 44,798 |   |
| **Total                assets**                                                                                              |   | **$**                     | **1,834,929** |   |                           | $      | 1,710,942 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                |   |                      |          |   |                           |   |   |   |
| **Current                liabilities**                                                                                       |   |                      |          |   |                           |   |   |   |
| 4.75%                Senior convertible notes                                                                                |   | **$**                     | **149,999**   |   |                           | $      | 0 |   |
| Accounts                payable                                                                                              |   | ** **                | **197,125**   |   |                           |   | 178,629 |   |
| Accrued                expenses                                                                                              |   | ** **                | **168,153**   |   |                           |   | 190,702 |   |
| Income                taxes payable                                                                                          |   | ** **                | **1,233**     |   |                           |   | 0 |   |
| Current                portion – long-term debt                                                                        |   | ** **                | **10,134**    |   |                           |   | 10,887 |   |
| **Total                current liabilities**                                                                                 |   | ** **                | **526,644**   |   |                           |   | 380,218 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| Deferred                taxes                                                                                                |   | ** **                | **56,944**    |   |                           |   | 57,340 |   |
| Other                non-current liabilities                                                                                 |   | ** **                | **164,492**   |   |                           |   | 144,722 |   |
| Long-term                debt                                                                                                |   | ** **                | **279,129**   |   |                           |   | 181,124 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| **Stockholders’                equity**                                                                                |   |                      |          |   |                           |   |   |   |
| Common                Stock $.10 par value:                                                                                  |   |                      |          |   |                           |   |   |   |
| Authorized                – 300,000,000 shares                                                                         |   |                      |          |   |                           |   |   |   |
| Issued                – 136,020,034 shares and 135,762,531 shares                                                      |   | ** **                | **13,602**    |   |                           |   | 13,576 |   |
| Additional                paid-in capital                                                                                    |   | ** **                | **255,120**   |   |                           |   | 285,159 |   |
| Treasury                stock at cost – 22,580,893 shares and 12,265,993 shares                                        |   | ** **                | **(215,238**  | **)**  |                           |   | (84,136 | ) |
| Accumulated                other comprehensive income/(loss)                                                                 |   | ** **                | **(2**        | **)**  |                           |   | 1 |   |
| Retained                earnings                                                                                             |   | ** **                | **754,238**   |   |                           |   | 732,938 |   |
| **Total                stockholders’ equity**                                                                          |   | ** **                | **807,720**   |   |                           |   | 947,538 |   |
| **Total                liabilities and stockholders’ equity**                                                          |   | **$**                     | **1,834,929** |   |                           | $      | 1,710,942 |   |
|                                                                                                                         |   |                      |          |   |                           |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |   |
|                                                                                                                         |   |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                 |   |

----

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**AND      COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                         |   | **Thirteen                Weeks Ended** |        |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|
|                                                                                                                         |   | **May                5,**               |        |   | **April                29,** |   |
| ***(In                thousands, except per share amounts)***                                                                |   | **2007**                                |        |   | **2006** |   |
|                                                                                                                         |   |                                    |        |   |   |   |
| **Net                sales**                                                                                                 |   | **$**                                   | **784,712** |   |   | $ | 734,922 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                                   |   | ** **                              | **546,197** |   |   |   | 501,072 |   |
| Selling,                general, and administrative expenses                                                                 |   | ** **                              | **195,620** |   |   |   | 181,447 |   |
| **Total                operating expenses**                                                                                  |   | ** **                              | **741,817** |   |   |   | 682,519 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Income                from operations**                                                                                    |   | ** **                              | **42,895**  |   |   |   | 52,403 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| Other                income                                                                                                  |   | ** **                              | **1,330**   |   |   |   | 1,547 |   |
| Interest                expense                                                                                              |   | ** **                              | **(3,263**  | **)** |   |   | (4,124 | ) |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| Income                before income taxes                                                                                    |   | ** **                              | **40,962**  |   |   |   | 49,826 |   |
| Income                tax provision                                                                                          |   | ** **                              | **14,664**  |   |   |   | 17,765 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Net                income**                                                                                                |   | ** **                              | **26,298**  |   |   |   | 32,061 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Other                comprehensive income, net of tax**                                                                    |   |                                    |        |   |   |   |   |   |
| Unrealized                (losses)/gains on available-for-sale securities,                                                   |   |                                    |        |   |   |   |   |   |
| net                of income tax                benefit/(provision) of $1 in 2007 and ($2) in 2006                           |   | ** **                              | **(3**      | **)** |   |   | 3 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Comprehensive                income**                                                                                      |   | **$**                                   | **26,295**  |   |   | $ | 32,064 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Basic                net income per share**                                                                                |   | **$**                                   | **.21**     |   |   | $ | .26 |   |
|                                                                                                                         |   |                                    |        |   |   |   |   |   |
| **Diluted                net income per share**                                                                              |   | **$**                                   | **.20**     |   |   | $ | .24 |   |
|                                                                                                                         |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |   |
|                                                                                                                         |   |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                 |   |

----

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                           |   | **Thirteen                Weeks Ended** |         |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------------|
|                                                                                                           |   | **May                5,**               |         |   | **April                29,** |   |
| ***(In                thousands)***                                                                            |   | **2007**                                |         |   | **2006** |   |
|                                                                                                           |   |                                    |         |   |   |   |
| **Operating                activities**                                                                        |   |                                    |         |   |   |   |
| Net                income                                                                                      |   | **$**                                   | **26,298**   |   |   | $ | 32,061 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities |   |                                    |         |   |   |   |   |   |
| Depreciation                and amortization                                                                   |   | ** **                              | **22,744**   |   |   |   | 20,158 |   |
| Deferred                income taxes                                                                           |   | ** **                              | **(395**     | **)** |   |   | (1,665 | ) |
| Stock-based                compensation                                                                        |   | ** **                              | **2,924**    |   |   |   | 2,551 |   |
| Excess                tax benefits related to stock-based compensation                                         |   | ** **                              | **(636**     | **)** |   |   | (2,035 | ) |
| Net                loss from disposition of capital assets                                                     |   | ** **                              | **460**      |   |   |   | 353 |   |
| Net                gain from securitization activities                                                         |   | ** **                              | **(193**     | **)** |   |   | (152 | ) |
| Changes                in operating assets and liabilities                                                     |   |                                    |         |   |   |   |   |   |
| Accounts                receivable, net                                                                        |   | ** **                              | **26,535**   |   |   |   | 30,118 |   |
| Merchandise                inventories                                                                         |   | ** **                              | **(40,075**  | **)** |   |   | (72,206 | ) |
| Accounts                payable                                                                                |   | ** **                              | **18,496**   |   |   |   | 49,720 |   |
| Deferred                advertising                                                                            |   | ** **                              | **1,006**    |   |   |   | (953 | ) |
| Prepayments                and other                                                                           |   | ** **                              | **4,625**    |   |   |   | (11,127 | ) |
| Income                taxes payable                                                                            |   | ** **                              | **1,869**    |   |   |   | 18,274 |   |
| Accrued                expenses and other                                                                      |   | ** **                              | **(3,476**   | **)** |   |   | (6,160 | ) |
| **Net                cash provided by operating activities**                                                   |   | ** **                              | **60,182**   |   |   |   | 58,937 |   |
|                                                                                                           |   |                                    |         |   |   |   |   |   |
| **Investing                activities**                                                                        |   |                                    |         |   |   |   |   |   |
| Investment                in capital assets                                                                    |   | ** **                              | **(37,511**  | **)** |   |   | (23,854 | ) |
| Gross                purchases of securities                                                                   |   | ** **                              | **(1,598**   | **)** |   |   | (3,251 | ) |
| Proceeds                from sales of securities                                                               |   | ** **                              | **2,563**    |   |   |   | 9,463 |   |
| Increase                in other assets                                                                        |   | ** **                              | **(3,523**   | **)** |   |   | (7,042 | ) |
| **Net                cash used by investing activities**                                                       |   | ** **                              | **(40,069**  | **)** |   |   | (24,684 | ) |
|                                                                                                           |   |                                    |         |   |   |   |   |   |
| **Financing                activities**                                                                        |   |                                    |         |   |   |   |   |   |
| Proceeds                from short-term borrowings                                                             |   | ** **                              | **5,383**    |   |   |   | 96,418 |   |
| Repayments                of short-term borrowings                                                             |   | ** **                              | **(5,383**   | **)** |   |   | (106,418 | ) |
| Proceeds                from issuance of senior convertible notes                                              |   | ** **                              | **250,000**  |   |   |   | 0 |   |
| Repayments                of long-term borrowings                                                              |   | ** **                              | **(2,749**   | **)** |   |   | (3,766 | ) |
| Payments                of deferred financing costs                                                            |   | ** **                              | **(6,250**   | **)** |   |   | 0 |   |
| Excess                tax benefits related to stock-based compensation                                         |   | ** **                              | **636**      |   |   |   | 2,035 |   |
| Purchase                of hedge on senior convertible notes                                                   |   | ** **                              | **(82,250**  | **)** |   |   | 0 |   |
| Sale                of common stock warrants                                                                   |   | ** **                              | **49,050**   |   |   |   | 0 |   |
| Purchases                of treasury stock                                                                     |   | ** **                              | **(131,102** | **)** |   |   | 0 |   |
| Net                proceeds/(payments) from shares issued under employee stock                plans            |   | ** **                              | **(373**     | **)** |   |   | 2,223 |   |
| **Net                cash provided/(used) by financing activities**                                            |   | ** **                              | **76,962**   |   |   |   | (9,508 | ) |
|                                                                                                           |   |                                    |         |   |   |   |   |   |
| **Increase                in cash and cash equivalents**                                                       |   | ** **                              | **97,075**   |   |   |   | 24,745 |   |
| Cash                and cash equivalents, beginning of period                                                  |   | ** **                              | **143,838**  |   |   |   | 130,132 |   |
| **Cash                and cash equivalents, end of period**                                                    |   | **$**                                   | **240,913**  |   |   | $ | 154,877 |   |
|                                                                                                           |   |                                    |         |   |   |   |   |   |
| ***See                Notes to Condensed Consolidated Financial                Statements***                   |   |

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL          STATEMENTS**

**(Unaudited)**

**Note      1. Condensed Consolidated Financial Statements**

***Segment      Reporting***

**, **
**“Note **
**10.**
** Segment Reporting”**

***Stock-based      Compensation***

**“Item      8.**
** **
** Financial Statements and      Supplementary Data; Note 1**
**1**
**.**
** **
**Stock**
**-Based      Compensation**
** Plans” **

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

|                                                                  |   |       |      |   | **Average** |   |   |                             |   |
|-----------------------------------------------------------------------|--------|------------|-----------|--------|-------------|--------|--------|----------------------------------|--------|
|                                                                  |   | **Option** |      |   | **Option**  |   |   | **Option                Prices** |   |
|                                                                  |   | **Shares** |      |   | **Price**   |   |   | **Per                Share**     |   |
|                                                                  |   |       |      |   |        |   |   |                             |   |
| **Outstanding                at February 3, 2007**                    |   |       | 2,217,790 |   |        | $      | 5.82   |                             |   | $ | 1.00 |   |   | – |   |   | $ | 13.84 |   |
| Granted                **–**option price less than market price |   |       | 18,000    |   |        |   | 1.00   |                             |   |   | 1.00 |   |   | – |   |   |   | 1.00 |   |
| Canceled/forfeited                                                    |   |       | (4,254    | )      |        |   | 7.72   |                             |   |   | 1.00 |   |   | – |   |   |   | 11.28 |   |
| Exercised                                                             |   |       | (62,377   | )      |        |   | 5.38   |                             |   |   | 1.00 |   |   | – |   |   |   | 8.46 |   |
| **Outstanding                at May 5, 2007**                         |   |       | 2,169,159 |   |        | $      | 5.79   |                             |   | $ | 1.00 |   |   | – |   |   | $ | 13.84 |   |
| **Exercisable                at May 5, 2007**                         |   |       | 2,040,863 |   |        | $      | 5.80   |                             |   | $ | 1.00 |   |   | – |   |   | $ | 13.84 |   |

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

*“Accounting for Stock-Based Compensation” *
*“Share-Based Payment”*

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

***Crosstown      Traders Integration Plan***

**“Item 8. Financial      Statements and Supplementary Data; Note **
**2**
**.**
**Acquisition of Crosstown      Traders, Inc.**
**”**
*“Recognition of      Liabilities in Connection with a Purchase Business      Combination.”*

|                                               |   | **Balance                at**  |   |   | **Thirteen                Weeks Ended** |   |   | **Balance                at** |   |
|----------------------------------------------------|--------|--------------------------------|--------|--------|-----------------------------------------|--------|--------|-------------------------------|--------|
|                                               |   | **February                3,** |   |   | **May                5, 2007**          |   |   | **May                5,**     |   |
| ***(In                thousands)***                |   | **2007**                       |   |   | **Payments/Settlements**                |   |   | **2007**                      |   |
|                                               |   |                           |   |   |                                    |   |   |                          |   |
| Lease                termination and related costs |   | $                              | 1,820  |   |                                    | $      | (219   | )                             |   | $ | 1,601 |   |
| Other                costs                         |   |                           | 239    |   |                                    |   | (72    | )                             |   |   | 167 |   |
| Total                                              |   | $                              | 2,059  |   |                                    | $      | (291   | )                             |   | $ | 1,768 |   |

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      2. Accounts Receivable**

|                                           |   | **May                5,** |   |   | **February                3,** |   |
|------------------------------------------------|--------|---------------------------|--------|--------|--------------------------------|--------|
| ***(In                thousands)***            |   | **2007**                  |   |   | **2007**                       |   |
|                                           |   |                      |   |   |                           |   |
| Due                from customers              |   | $                         | 12,458 |   |                           | $      | 38,449 |   |
| Allowance                for doubtful accounts |   |                      | (5,627 | )      |                           |   | (5,083 | ) |
| Net                accounts receivable         |   | $                         | 6,831  |   |                           | $      | 33,366 |   |

**Note      3. Trademarks and Other Intangible Assets**

|                                                                               |   | **May                5,** |    |   | **February                3,** |   |
|------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|--------------------------------|--------|
| ***(In                thousands)***                                                |   | **2007**                  |    |   | **2007**                       |   |
|                                                                               |   |                      |    |   |                           |   |
| Trademarks,                tradenames, and internet domain names                   |   | $                         | 241,988 |   |                           | $      | 241,850 |   |
| Customer                lists, customer relationships, and covenant not to compete |   |                      | 16,400  |   |                           |   | 16,400 |   |
| Total                at cost                                                       |   |                      | 258,388 |   |                           |   | 258,250 |   |
| Less                accumulated amortization of customer lists, customer           |   |                      |    |   |                           |   |   |   |
| relationships,                and covenant not                to compete           |   |                      | 9,579   |   |                           |   | 8,760 |   |
| Net                trademarks and other intangible assets                          |   | $                         | 248,809 |   |                           | $      | 249,490 |   |

**Note      4. Short-term Borrowings and Long-term Debt**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **May                5,** |    |   | **February                3,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|--------------------------------|--------|
| ***(In                thousands)***                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | **2007**                  |    |   | **2007**                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                      |    |   |                           |   |
| **Short-term                borrowings**                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                      |    |   |                           |   |
| 4.75%                Senior Convertible Notes, due June 2012(1)                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                         | 149,999 |   |                           | $      | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                      |    |   |                           |   |   |   |
| **Long-term                debt**                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                      |    |   |                           |   |   |   |
| 1.125%                Senior Convertible Notes, due May 2014                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                         | 250,000 |   |                           | $      | 0 |   |
| 4.75%                Senior Convertible Notes, due June 2012(1)                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                      | 0       |   |                           |   | 149,999 |   |
| Capital                lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                      | 10,814  |   |                           |   | 12,853 |   |
| 6.07%                mortgage note, due October 2014                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                      | 11,542  |   |                           |   | 11,696 |   |
| 6.53%                mortgage note, due November 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 7,700   |   |                           |   | 8,050 |   |
| 7.77%                mortgage note, due December 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                      | 8,350   |   |                           |   | 8,496 |   |
| Other                long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                      | 857     |   |                           |   | 917 |   |
| Total                long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                      | 289,263 |   |                           |   | 192,011 |   |
| Less                current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                      | 10,134  |   |                           |   | 10,887 |   |
| Long-term                debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                         | 279,129 |   |                           | $      | 181,124 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| *(1)                On April 30, 2007, we called these notes for redemption on June 4,                2007. As of June 4, 2007, holders of $149,956,000 aggregate principal                amount of these notes had exercised their right to convert their                notes                into an aggregate of 15,145,556 shares of our common stock and the                remaining notes were redeemed for cash (see “**Note 12. Subsequent                Events”**below).* |   |

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      4. Short-term Borrowings and Long-term Debt (Continued)**

**“Note 12. Subsequent Events”**

*“Convertible Bonds with Issuer Option to Settle for      Cash upon Conversion”*
*“Accounting for Derivative      Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own      Stock.”  *

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      4. Short-term Borrowings and Long-term Debt (Continued)**

*Accounting for Derivative Instruments and Hedging      Activities,”*

*“Earnings Per Share,”*

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      4. Short-term Borrowings and Long-term Debt (Continued)**

**“Note 12.      Subsequent Events”**

**Note      5. Stockholders’ Equity**

|                                                                                                                          |   | **Thirteen**                   |     |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|
|                                                                                                                          |   | **Weeks                Ended** |     |
|                                                                                                                          |   | **May                5,**      |     |
| ***(Dollars                in thousands)***                                                                                   |   | **2007**                       |     |
|                                                                                                                          |   |                           |     |
| Total                stockholders’ equity, beginning of period                                                          |   | $                              | 947,538  |   |
| Cumulative                effect of adoption of FIN No. 48(1)                                                                 |   |                           | (4,998   | ) |
| Net                income                                                                                                     |   |                           | 26,298   |   |
| Issuance                of common stock (149,808 shares), net of shares withheld for payroll                taxes             |   |                           | (373     | ) |
| Purchase                of treasury shares (10,314,900 shares)                                                                |   |                           | (131,102 | ) |
| Sale                of common stock warrants(2)                                                                               |   |                           | 49,050   |   |
| Purchase                of common stock call options(2)                                                                       |   |                           | (82,250  | ) |
| Stock-based                compensation expense                                                                               |   |                           | 2,924    |   |
| Excess                tax benefits related to stock-based compensation                                                        |   |                           | 636      |   |
| Unrealized                losses on available-for-sale securities, net of tax                                                 |   |                           | (3       | ) |
| Total                stockholders’ equity, end of period                                                                |   | $                              | 807,720  |   |
| ____________________                                                                                                          |   |
|                                                                                                                          |   |
| *(1)**See*** *****“Note                8. Income                Taxes”*** below.                             |   |
|                                                                                                                          |   |
| *(2)**See*** *****“Note                4. Short-term                Borrowings and Long-term Debt”*** above. |   |

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      6. Customer Loyalty Card Programs**

**Note      7. Net Income Per Share**

|                                                                                                                |   | **Thirteen                Weeks Ended** |    |
|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                                                                                |   | **May                5,**               |    |   | **April                29,** |   |
| ***(In                thousands, except per share amounts)***                                                       |   | **2007**                                |    |   | **2006** |   |
|                                                                                                                |   |                                    |    |   |   |   |
| Basic                weighted average common shares outstanding                                                     |   |                                    | 123,003 |   |   |   | 121,813 |   |
| Dilutive                effect of assumed conversion of 4.75% Senior Convertible                Notes               |   |                                    | 15,182  |   |   |   | 15,182 |   |
| Dilutive                effect of stock options and awards                                                          |   |                                    | 1,753   |   |   |   | 2,432 |   |
| Diluted                weighted average common shares and equivalents outstanding                                   |   |                                    | 139,938 |   |   |   | 139,427 |   |
|                                                                                                                |   |                                    |    |   |   |   |   |   |
| Net                income                                                                                           |   | $                                       | 26,298  |   |   | $ | 32,061 |   |
| Decrease                in interest expense from assumed conversion of 4.75% Senior                Convertible      |   |                                    |    |   |   |   |   |   |
| Notes,                net of income                taxes                                                            |   |                                    | 1,128   |   |   |   | 1,128 |   |
| Net                income used to determine diluted net income per share                                            |   | $                                       | 27,426  |   |   | $ | 33,189 |   |
|                                                                                                                |   |                                    |    |   |   |   |   |   |
| Options                with weighted average exercise price greater than market price, excluded                from |   |                                    |    |   |   |   |   |   |
| computation                of net income per share:                                                                 |   |                                    |    |   |   |   |   |   |
| Number                of shares                                                                                     |   |                                    | 1       |   |   |   | 0 |   |
| Weighted                average exercise price per share                                                            |   | $                                       | 13.84   |   |   | $ | 0.00 |   |

**”Note 4. Short-term Borrowings and Long-term      Debt”**
**“Note 12. Subsequent Events”**

**Note      8. Income Taxes**

*“Accounting for      Uncertainty in Income Taxes—an interpretation of FASB Statement No.      109.”*

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      8. Income Taxes (Continued)**

*“Accounting for Income Taxes.”*

**Note      9. Asset Securitization**

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      9. Asset Securitization (Continued)**

**“Item 8. Financial Statements and Supplementary Data; Note**
**16**
**. **
**Asset      Securitization**
**” **

**Note      10. Segment Reporting**

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

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      10. Segment Reporting (Continued)**

|                                                                                                                                                                                                             |   | **Retail** |    |   | **Direct-to-** |   |    | **Corporate**                |   |   |             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------|--------|----------------|--------|---------|------------------------------|--------|--------|------------------|--------|
| ***(In                thousands)***                                                                                                                                                                              |   | **Stores** |    |   | **Consumer**   |   |    | **and                Other** |   |   | **Consolidated** |   |
|                                                                                                                                                                                                             |   |       |    |   |           |   |    |                         |   |   |             |   |
| **Thirteen                weeks ended May 5, 2007(1)**                                                                                                                                                           |   |       |    |   |           |   |    |                         |   |   |             |   |
| Net                sales                                                                                                                                                                                         |   | $          | 685,522 |   |           | $      | 98,372  |                         |   | $      | 818              |   |   | $ | 784,712 |   |
| Depreciation                and amortization                                                                                                                                                                     |   |       | 12,361  |   |           |   | 56      |                         |   |   | 10,327           |   |   |   | 22,744 |   |
| Income                before interest and taxes                                                                                                                                                                  |   |       | 74,030  |   |           |   | 1,490   |                         |   |   | (31,295          | )      |   |   | 44,225 |   |
| Interest                expense                                                                                                                                                                                  |   |       |    |   |           |   |    |                         |   |   | (3,263           | )      |   |   | (3,263 | ) |
| Income                tax provision                                                                                                                                                                              |   |       |    |   |           |   |    |                         |   |   | (14,664          | )      |   |   | (14,664 | ) |
| Net                income                                                                                                                                                                                        |   |       | 74,030  |   |           |   | 1,490   |                         |   |   | (49,222          | )      |   |   | 26,298 |   |
| Capital                expenditures                                                                                                                                                                              |   |       | 29,834  |   |           |   | 127     |                         |   |   | 7,550            |   |   |   | 37,511 |   |
|                                                                                                                                                                                                             |   |       |    |   |           |   |    |                         |   |   |             |   |   |   |   |   |
| **Thirteen                weeks ended April 29, 2006**                                                                                                                                                           |   |       |    |   |           |   |    |                         |   |   |             |   |   |   |   |   |
| Net                sales                                                                                                                                                                                         |   | $          | 627,404 |   |           | $      | 107,405 |                         |   | $      | 113              |   |   | $ | 734,922 |   |
| Depreciation                and amortization                                                                                                                                                                     |   |       | 11,094  |   |           |   | 32      |                         |   |   | 9,032            |   |   |   | 20,158 |   |
| Income                before interest and taxes                                                                                                                                                                  |   |       | 75,213  |   |           |   | 5,326   |                         |   |   | (26,589          | )      |   |   | 53,950 |   |
| Interest                expense                                                                                                                                                                                  |   |       |    |   |           |   |    |                         |   |   | (4,124           | )      |   |   | (4,124 | ) |
| Income                tax provision                                                                                                                                                                              |   |       |    |   |           |   |    |                         |   |   | (17,765          | )      |   |   | (17,765 | ) |
| Net                income                                                                                                                                                                                        |   |       | 75,213  |   |           |   | 5,326   |                         |   |   | (48,478          | )      |   |   | 32,061 |   |
| Capital                expenditures                                                                                                                                                                              |   |       | 15,413  |   |           |   | 28      |                         |   |   | 8,413            |   |   |   | 23,854 |   |
| ____________________                                                                                                                                                                                             |   |
|                                                                                                                                                                                                             |   |
| *(1)                Retail Stores segment includes 82 LANE BRYANT OUTLET stores and 45                PETITE                SOPHISTICATE OUTLET stores opened in the second half of Fiscal                2007.* |   |

**Note      11. Impact of Recent Accounting Pronouncements**

*“Accounting and Servicing of Financial      Assets – an amendment of FASB Statement No. 140.”*
*“Accounting for Transfers and Servicing of Financial      Assets and Extinguishments of Liabilities,”*

| ·   | Amortization                method – Amortize the servicing assets or liabilities in proportion to,                and over the period of, estimated net servicing income or loss and                assess                the assets or liabilities for impairment or increased obligation                based on                fair value at each reporting date. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fair                value measurement method – Measure the servicing assets or liabilities at                fair value at each reporting date and report changes in fair value                in                earnings in the period in which the changes                occur. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      11. Impact of Recent Accounting Pronouncements (Continued)**

*“How Taxes      Collected from Customers and Remitted to Governmental Authorities Should Be      Presented in the Income Statement (That Is, Gross versus Net      Presentation).”*

*“Accounting for Uncertainty in Income      Taxes—an interpretation of FASB Statement No. 109.”*

**“Note **
**8.**
** Income      Taxes”**

*“Accounting for Deferred Compensation and Postretirement Benefit Aspects      of      Endorsement Split-Dollar Life Insurance Agreements.”*

*“Accounting for Purchases of Life Insurance – Determining the Amount That      Could be Realized in Accordance with FASB Technical Bulletin      85-4.”*

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      11. Impact of Recent Accounting Pronouncements (Continued)**

*“Fair Value      Measurements.”*

**Note      12. Subsequent Events**

***Exercise      of Over-allotment Option for 1.125%Notes***

**“Note 4. Short-term Borrowings and Long-Term      Debt”**

----

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      12. Subsequent Events (Continued)**

***Redemption      of 4.75% Notes***

**“Note 4. Short-term Borrowings and Long-term Debt”**

----

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

**FORWARD-LOOKING      STATEMENTS**

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

| ·   | A                slowdown in the United States economy, an uncertain economic outlook,                and                escalating energy costs could lead to reduced consumer demand for                our                products in the future. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | We                may be unable to successfully integrate the operations of Crosstown                Traders, Inc. (“Crosstown Traders”) with the operations of Charming                Shoppes, Inc.  In addition, we cannot assure the successful                implementation of our business plan for Crosstown Traders, including                the                successful launch of our LANE BRYANT                catalog. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                cannot assure the successful implementation of our business plans                for                entry into the outlet store distribution channel and expansion of                our                CACIQUE®                product line through new store                formats. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

----

| ·   | We                depend on our distribution and fulfillment centers and third-party                freight                consolidators and service providers, and could incur significantly                higher                costs and longer lead times associated with distributing our products                to                our stores and shipping our products to our E-commerce and catalog                customers if operations at any of these locations were to be disrupted                for                any reason. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                depend on the availability of credit for our working capital needs,                including credit we receive from our suppliers and their agents,                and on                our credit card securitization facilities.  If we were unable to                obtain sufficient financing at an affordable cost, our ability to                merchandise our stores, E-commerce, or catalog businesses would be                adversely affected. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | We                rely significantly on foreign sources of production and face a variety                of                risks generally associated with doing business in foreign markets                and                importing merchandise from abroad.  Such risks include (but are not                necessarily limited to) political instability; imposition of, or                changes                in, duties or quotas; trade restrictions; increased security requirements                applicable to imports; delays in shipping; increased costs of                transportation; and issues relating to compliance with domestic or                international labor standards. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our                Retail Stores and Direct-to-Consumer segments experience seasonal                fluctuations in net sales and operating income.  Any decrease in                sales or margins during our peak sales periods, or in the availability                of                working capital during the months preceding such periods, could have                a                material adverse effect on our business.  In addition, extreme or                unseasonable weather conditions may have a negative impact on our                sales. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

| ·   | We                may be unable to hire and retain a sufficient number of suitable                sales                associates at our stores.  In addition, we are subject to the                Fair Labor Standards Act and various state and Federal laws and                regulations governing such matters as minimum wages, exempt status                classification, overtime, and employee benefits.  Changes in                Federal or state laws or regulations regarding minimum wages or other                employee benefits could cause us to incur additional wage and benefit                costs, which could adversely affect our results of                operations. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Our                Retail Stores segment sales are dependent upon a high volume of traffic                in                the strip centers and malls in which our stores are located, and                our                future retail store growth is dependent upon the availability of                suitable                locations for new stores. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Successful                operation of our E-commerce websites and our catalog business is                dependent                on our ability to maintain efficient and uninterrupted customer service                and fulfillment operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

----

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

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

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

| ·   | 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 indenture relating to the 1.125%                Notes.  Such a repurchase would require significant amounts of                cash and could adversely affect our financial                condition. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force                (“EITF”) is currently reviewing the accounting for convertible debt                instruments with terms similar to our 1.125% Notes.  The EITF is                considering a requirement to allocate a portion of the debt to the                embedded conversion feature, thereby creating an original issue discount                on the carrying value of the debt portion of the                instrument.  This original issue discount would subsequently be                amortized as interest expense over the term of the instrument, resulting                in an increase in reported interest expense.  Implementation of                such a change would not affect our cash                flows. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CRITICAL      ACCOUNTING POLICIES**

----

***Senior      Convertible Notes***

**“Notes to Condensed      Consolidated Financial Statements; Note 4. Short-term Borrowings and Long-term      Debt” **
**“Note 12. Subsequent Events”**

*“Convertible Bonds with Issuer Option to Settle for      Cash upon Conversion”*
*“Accounting for Derivative      Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own      Stock.”  *

*Accounting for Derivative Instruments and Hedging      Activities,”*

----

*Earnings Per Share,”*

***Income      Taxes***

*“Accounting      for Uncertainty in Income Taxes—an interpretation of FASB Statement No.      109”*
**“Notes to Condensed      Consolidated Financial Statements; Note**
**8**
**.  Income Taxes”**

----

**RECENT      DEVELOPMENTS**

**“Notes to Condensed Consolidated Financial Statements; Note 4.      Short-term Borrowings and Long-term Debt” **
**“Note 12.      Subsequent Events”**

----

**RESULTS      OF OPERATIONS**

|                                                                                           |   |                                       |   |   | **Percentage**               |   |
|------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|------------------------------|--------|
|                                                                                           |   | **Thirteen                Weeks Ended(1)** |   |   | **Change**                   |   |
|                                                                                           |   | **May                5,**                  |   |   | **April                29,** |   |   | **From                Prior** |   |
|                                                                                           |   | **2007**                                   |   |   | **2006**                     |   |   | **Period** |   |
|                                                                                           |   |                                       |   |   |                         |   |   |   |   |
| Net                sales                                                                       |   |                                       | 100.0  | %      |                         |   | 100.0 | % |   |   | 6.8 | % |
| Cost                of goods sold, buying, catalog, and occupancy                expenses |   |                                       | 69.6   |   |                         |   | 68.2 |   |   |   | 9.0 |   |
| Selling,                general, and administrative expenses                                   |   |                                       | 24.9   |   |                         |   | 24.7 |   |   |   | 7.8 |   |
| Income                from operations                                                          |   |                                       | 5.5    |   |                         |   | 7.1 |   |   |   | (18.1 | ) |
| Other                income                                                                    |   |                                       | 0.2    |   |                         |   | 0.2 |   |   |   | (14.0 | ) |
| Interest                expense                                                                |   |                                       | 0.4    |   |                         |   | 0.6 |   |   |   | (20.9 | ) |
| Income                tax provision                                                            |   |                                       | 1.9    |   |                         |   | 2.4 |   |   |   | (17.5 | ) |
| Net                income                                                                      |   |                                       | 3.4    |   |                         |   | 4.4 |   |   |   | (18.0 | ) |
| ____________________                                                                           |   |
|                                                                                           |   |
| *(1)                Results may not add due to rounding.*                                      |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **Thirteen                Weeks Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **May                5,**               |   |   | **April                29,** |   |
| ***(In                millions)***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **2007**                                |   |   | **2006** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                    |   |   |   |   |
| FASHION                BUG                                                                                                                                                      |   | $                                       | 257.7  |   |   | $ | 255.9 |   |
| LANE                BRYANT(1)                                                                                                                                                   |   |                                    | 322.4  |   |   |   | 277.0 |   |
| CATHERINES                                                                                                                                                                      |   |                                    | 100.6  |   |   |   | 94.5 |   |
| Other                retail stores(2)                                                                                                                                           |   |                                    | 4.8    |   |   |   | 0.0 |   |
| Total                Retail Stores segment                sales                                                                                                                 |   |                                    | 685.5  |   |   |   | 627.4 |   |
| Total                Direct-to-Consumer segment                sales                                                                                                            |   |                                    | 98.4   |   |   |   | 107.4 |   |
| Corporate                and other(3)                                                                                                                                           |   |                                    | 0.8    |   |   |   | 0.1 |   |
| Total                net                sales                                                                                                                                   |   | $                                       | 784.7  |   |   | $ | 734.9 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| *(1)                Includes LANE BRYANT OUTLET stores in the thirteen weeks ended May                5,                2007.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| *(2)                Includes PETITE SOPHISTICATE OUTLET stores in the thirteen weeks                ended May                5, 2007.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| *(3)                Primarily revenue related to loyalty card fees.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **Thirteen                Weeks Ended** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **May                5,**               | **April                29,** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **2007**                                | **2006** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| **Retail                Stores segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                    |   |
| Increase                (decrease) in comparable store sales(1)                :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                    |   |
| Consolidated                retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 0%                                      | 1% |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (2)                                     | (1) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 0                                       | 2 |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 5                                       | 5 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| Sales                from new stores as a percentage of total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |   |
| consolidated                prior-period                sales(2):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 1                                       | 2 |
| LANE                BRYANT(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 9                                       | 4 |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 1                                       | 1 |
| Other                retail stores(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 1                                       | — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| Prior-period                sales from closed stores as a percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| of                total consolidated                prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                    |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (1)                                     | (1) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (2)                                     | (1) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (0)                                     | (1) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| Increase                in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 9                                       | 4 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| **Direct-to-Consumer                segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                    |   |
| Decrease                in Direct-to-Consumer segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (8)                                     | — |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                    |   |
| **Increase                in consolidated total net sales**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 7                                       | 22(5) |
| *____________________*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(1)                “Comparable store sales” is not a measure that has been defined under                generally accepted accounting principles.  The method of calculating                comparable store sales varies across the retail industry and, therefore,                our calculation of comparable store sales is not necessarily comparable                to                similarly-titled measures reported by other companies.  We define                comparable store sales as sales from stores operating in both the                current                and prior-year periods.  New stores are added to the comparable store                sales base 13 months after their open date.  Sales from stores that                are relocated within the same mall or strip-center, remodeled, or                have a                legal square footage change of less than 20% are included in the                calculation of comparable store sales.  Sales from stores that are                relocated outside the existing mall or strip-center, or have a legal                square footage change of 20% or more, are excluded from the calculation                of                comparable store sales until 13 months after the relocated store                is                opened.  Stores that are temporarily closed for a period of 4 weeks                or more are excluded from the calculation of comparable store sales                for                the applicable periods in the year of closure and the subsequent                year.  Non-store sales, such as catalog and internet sales, are                excluded from the calculation of comparable store                sales.* |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(2)                Includes incremental Retail Stores segment E-commerce                sales.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(3)                Includes LANE BRYANT OUTLET stores.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(4)                Includes PETITE SOPHISTICATE OUTLET stores.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(5)                The increase in consolidated total net sales for the thirteen weeks                ended                April 29, 2006 includes an 18% increase as a result of the acquisition                of                Crosstown Traders, Inc. on June 2, 2005.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

|                                                                                                                                                  |   | **FASHION** |   |   | **LANE**   |   |   |           |   |   |         |   |   |      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|-----------|--------|
|                                                                                                                                                  |   | **BUG**     |   |   | **BRYANT** |   |   | **CATHERINES** |   |   | **Other(1)** |   |   | **Total** |   |
|                                                                                                                                                  |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |
| **Fiscal                2008 Year-to-Date(2):**                                                                                                       |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |
| Stores                at February 3, 2007                                                                                                             |   |        | 1,009  |   |       |   | 859    |           |   |   | 465          |   |   |      | 45     |   |   |   | 2,378 |   |
|                                                                                                                                                  |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |   |   |   |   |   |
| Stores                opened                                                                                                                          |   |        | 5      |   |       |   | 24     | (3)            |   |   | 2            |   |   |      | 1      |   |   |   | 32 |   |
| Stores                closed                                                                                                                          |   |        | (6     | )      |       |   | (6     | )              |   |   | (2           | )      |   |      | (0     | ) |   |   | (14 | ) |
| Net                change in stores                                                                                                                   |   |        | (1     | )      |       |   | 18     |           |   |   | 0            |   |   |      | 1      |   |   |   | 18 |   |
|                                                                                                                                                  |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |   |   |   |   |   |
| Stores                at May 5, 2007                                                                                                                  |   |        | 1,008  |   |       |   | 877    |           |   |   | 465          |   |   |      | 46     |   |   |   | 2,396 |   |
|                                                                                                                                                  |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |   |   |   |   |   |
| Stores                relocated during period                                                                                                         |   |        | 6      |   |       |   | 10     |           |   |   | 5            |   |   |      | 0      |   |   |   | 21 |   |
|                                                                                                                                                  |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |   |   |   |   |   |
| **Fiscal                2008:**                                                                                                                       |   |        |   |   |       |   |   |           |   |   |         |   |   |      |   |   |   |   |   |   |
| Planned                store openings                                                                                                                 |   |        | 10     |   |       |   | 65-75  | (4)            |   |   | 10           |   |   |      | 10     | (5) |   |   | 95-107 |   |
| Planned                store closings                                                                                                                 |   |        | 18-22  |   |       |   | 15-18  | (6)            |   |   | 7-10         |   |   |      | 0      |   |   |   | 40-50 |   |
| Planned                store relocations                                                                                                              |   |        | 20-25  |   |       |   | 45-50  | (7)            |   |   | 10-15        |   |   |      | 0      |   |   |   | 75-90 |   |
| *____________________*                                                                                                                                |   |
|                                                                                                                                                  |   |
| *(1)                Includes PETITE SOPHISTICATE OUTLET stores.*                                                                                      |   |
|                                                                                                                                                  |   |
| *(2)                Excludes 2 Crosstown Traders outlet stores that are included in our                Direct-to-Consumer segment.*                   |   |
|                                                                                                                                                  |   |
| *(3)                Includes 5 LANE BRYANT OUTLET stores.*                                                                                            |   |
|                                                                                                                                                  |   |
| *(4)                Includes approximately 35 LANE BRYANT intimate apparel side-by-side                stores and 15 LANE BRYANT OUTLET stores.* |   |
|                                                                                                                                                  |   |
| *(5)                Includes 5 PETITE SOPHISTICATE OUTLET stores and 5 full-line PETITE                SOPHISTICATE stores.*                          |   |
|                                                                                                                                                  |   |
| *(6)                Includes 1 LANE BRYANT OUTLET store.*                                                                                             |   |
|                                                                                                                                                  |   |
| *(7)                Includes approximately 32 conversions to LANE BRYANT intimate apparel                side-by-side stores.*                        |   |

**Comparison      of Thirteen Weeks Ended May 5, 2007 and April 29, 2006**

***Net      Sales***

----

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

----

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

***Income      Tax Provision***

**“CRITICAL ACCOUNTING POLICIES;**
***Income Taxes”***

**LIQUIDITY      AND CAPITAL RESOURCES**

**“FINANCING;**
***Long-term debt”***

|                                          |   | **May                5,** |   |   | **February                3,** |   |
|-----------------------------------------------|--------|---------------------------|--------|--------|--------------------------------|--------|
| ***(Dollars                in millions)***    |   | **2007**                  |   |   | **2007**                       |   |
|                                          |   |                      |   |   |                           |   |
| Cash                and cash equivalents      |   | $                         | 240.9  |   |                           | $      | 143.8 |   |
| Available-for-sale                securities  |   |                      | 0.3    |   |                           |   | 2.0 |   |
| Working                capital                |   | $                         | 417.8  |   |                           | $      | 460.6 |   |
| Current                ratio                  |   |                      | 1.8    |   |                           |   | 2.2 |   |
| Long-term                debt to equity ratio |   |                      | 34.6   | %      |                           |   | 19.1 | % |

----

***Capital      Expenditures***

***Dividends***

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

----

| ***(Dollars                in millions)***                                                                                                                                                                                                                                                                                                                                                                                                             | **Series                1999-2** | **Series                2002-1** | **Series                2004**   | **Series                2004-1** | **2005-RPA**(1)                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                             |                             |                             |                             |                             |
| Date                of facility                                                                                                                                                                                                                                                                                                                                                                                                                        | May                1999          | November                2002     | January                2004      | August                2004       | May                2005          |
| Type                of facility                                                                                                                                                                                                                                                                                                                                                                                                                        | Conduit                          | Term                             | Conduit                          | Term                             | Conduit                          |
| Maximum                funding                                                                                                                                                                                                                                                                                                                                                                                                                         | $50.0                            | $100.0                           | $50.0                            | $180.0                           | $55.0                            |
| Funding                as of May 5, 2007                                                                                                                                                                                                                                                                                                                                                                                                               | $36.0                            | $100.0                           | $0.0                             | $180.0                           | $44.5                            |
| First                  scheduled principal payment                                                                                                                                                                                                                                                                                                                                                                                                     | Not                applicable    | August                2007       | Not                applicable    | April                2009        | Not                applicable    |
| Expected                final principal payment                                                                                                                                                                                                                                                                                                                                                                                                        | Not                applicable(2) | May                2008          | Not                applicable(2) | March                2010        | Not                applicable(2) |
| Renewal                                                                                                                                                                                                                                                                                                                                                                                                                                                | Annual                           | Not                applicable    | Annual                           | Not                applicable    | Annual                           |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(1)                Receivables Purchase Agreement (for the Crosstown Traders catalog                proprietary credit card receivables program).*                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(2)                Series 1999-2 and Series 2004 have scheduled final payment dates                that                occur in the twelfth month following the month in which the series                begins                amortizing.  These series and 2005-RPA generally begin                amortizing 364 days after start of the purchase commitment by the                series                purchaser currently in effect.* |

----

**“Part II, Item 7. Management’s Discussion and      Analysis of Financial Condition and Results of Operations” **
**“Part II, Item 8. Financial Statements and Supplementary Data;      Notes to      Consolidated Financial Statements; Note 1**
**6**
**.      Asset Securitization”**
**“MARKET      RISK’**

**“Item 8. Financial Statements and      Supplementary Data; Notes to Consolidated Financial Statements; Note      1**
**7**
**. Leases”**

----

**FINANCING**

***Revolving      Credit Facility***

***Long-term      Debt***

----

----

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

**MARKET      RISK**

----

**IMPACT      OF RECENT ACCOUNTING PRONOUNCEMENTS**

**“Item 1. Notes To Condensed Consolidated Financial Statements      (Unaudited); Note **
**11.**
** Impact of Recent      Accounting Pronouncements”**

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

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

**Item      4. Controls and Procedures**

*“Accounting for Uncertainty in Income      Taxes,”*

----

**PART      II. OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Item      1A. Risk Factors**

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

----

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   | **Total**                           |   |   | **Maximum**                    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|--------|-------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   | **Number**                          |   |   | **Number                of**   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   | **of                Shares**        |   |   | **Shares                that** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   | **Purchased                as**     |   |   | **May                Yet be**  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Total**                    |       |   |                          |   |   | **Part                of Publicly** |   |   | **Purchased**                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Number**                   |       |   | **Average**                   |   |   | **Announced**                       |   |   | **Under                the**   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **of                Shares** |       |   | **Price                Paid** |   |   | **Plans                or**         |   |   | **Plans                or**    |   |
| **Period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Purchased**                |       |   | **per                Share**  |   |   | **Programs**(3)                     |   |   | **Programs**(3)                |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   |                                |   |   |                           |   |
| February                4, 2007 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                         |       |   |                          |   |   |                                |   |   |                           |   |
| March                3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         | 10,478     | (1)    |                          | $      | 12.79  |                                |   |   | —                        |   |   |   | — |   |
| March                4, 2007 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   |                                |   |   |                           |   |   |   |   |   |
| April                7, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         | 66,019     | (1)    |                          |   | 12.05  |                                |   |   | —                        |   |   |   | — |   |
| April                8, 2007 through                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                         |       |   |                          |   |   |                                |   |   |                           |   |   |   |   |   |
| May                5, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                         | 10,317,510 | (2)    |                          |   | 12.71  |                                |   |   | —                        |   |   |   | — |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                         | 10,394,007 |   |                          | $      | 12.71  |                                |   |   | —                        |   |   |   | — |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| *(1)                Shares withheld for the payment of payroll taxes on employee stock                awards                that vested during the period.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| *(2)                Includes 2,610 shares ($12.45 average price paid per share) withheld                for                the payment of payroll taxes on employee stock awards that vested                during                the period. Also includes 10,314,900 shares ($12.71 average price                paid per share) purchased through negotiated transactions with                institutional investors in anticipation of the exercise by holders                of our                4.75% Senior Convertible Notes Due 2012 of their right to convert                their                notes to shares of our common stock as the result of our call for                redemption on April 30, 2007 (see **“PART 1. Item 1. Notes to                Condensed Consolidated Financial Statements; Note 4. Short-term Borrowings                and Long-term Debt”** and **“Note 12. Subsequent                Events”** above).*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| *(3)                In Fiscal 1998, we publicly announced that our Board of Directors                granted                authority to repurchase up to 10,000,000 shares of our common                stock. In Fiscal 2000, we publicly announced that our Board of                Directors granted authority to repurchase up to an additional 10,000,000                shares of our common stock. In Fiscal 2003, the Board of Directors                granted an additional authorization to repurchase 6,350,662 shares                of                common stock issued to Limited Brands in connection with our acquisition                of LANE BRYANT. From Fiscal 1998 through Fiscal 2003, pursuant to                these authorizations, we repurchased a total of 21,370,993 shares                of                common stock, which included shares purchased on the open market                as well                as shares repurchased from Limited Brands. As of May 5, 2007,                4,979,669 shares of our common stock remain available for repurchase                under                these programs. Our revolving credit facility allows the repurchase                of our common stock subject to maintaining a minimum level of Excess                Availability (as defined in the facility agreement) immediately before                and                after such repurchase. As conditions may allow, we may from time to                time acquire additional shares of our common stock under these                programs. Such shares, if purchased, would be held as treasury                shares. No shares were acquired under these programs during the                thirteen weeks ended May 5, 2007. The repurchase programs have no                expiration date.* |   |

----

**Item      6. Exhibits**

| 2.1    | Stock                Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition                Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown                Traders, Inc. whose names are set forth on the signature pages thereto,                and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,                incorporated by reference to Form 8-K of the Registrant dated June                2,                2005, filed on June 8, 2005. (Exhibit 2.1). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.1    | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,                Exhibit 3.1).                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.2    | Bylaws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999 (File No. 000-07258,                Exhibit 3.2).                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.1    | Indenture                between the Company and Wells Fargo Bank, National Association, dated                as                of April 30, 2007, incorporated by reference to Form 8-K of the Registrant                dated April 30, 2007, filed on May 3, 2007.  (Exhibit                4.1).                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.2    | Form                of 1.125% Senior Convertible Note due 2012 (included in Exhibit                4.1)                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1   | Registration                Rights Agreement among the Company and Banc of America Securities                LLC and                J.P. Morgan Securities Inc., dated as of April 30, 2007, incorporated                by                reference to Form 8-K of the Registrant dated April 30, 2007, filed                on May                3, 2007.  (Exhibit 10.1).                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2   | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and Bank of America, N.A., dated April 24, 2007, incorporated                by                reference to Form 8-K of the Registrant dated April 25, 2007, filed                on May                1, 2007.  (Exhibit 10.1).                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.3   | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and JPMorgan Chase Bank, National Association, dated April                24,                2007, incorporated by reference to Form 8-K of the Registrant dated                April                25, 2007, filed on May 1, 2007.  (Exhibit                10.2).                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.4   | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and Wachovia Bank, National Association, dated April 24,                2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit 10.3).                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.5   | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and Bank of America, N.A., dated April 24, 2007, incorporated by                reference                to Form 8-K of the Registrant dated April 25, 2007, filed on May                1,                2007.  (Exhibit 10.4).                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.6   | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and JPMorgan Chase Bank, National Association, dated April 24, 2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit 10.5).                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.7   | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and Wachovia Bank, National Association, dated April 24, 2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit                10.6).                                                                                                                                             |

----

| 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. |

----

**SIGNATURES**

|                              | **CHARMING                SHOPPES, INC.**            |
|-----------------------------------|------------------------------------------------------|
|                              | (Registrant)                                         |
|                              |                                                 |
|                              |                                                 |
|                              |                                                 |
| Date:                June 7, 2007 | **/S/                DORRIT J. BERN**                |
|                              | Dorrit                J. Bern                        |
|                              | Chairman                of the Board                 |
|                              | President                and Chief Executive Officer |
|                              |                                                 |
|                              |                                                 |
|                              |                                                 |
| Date:                June 7, 2007 | **/S/                ERIC M. SPECTER**               |
|                              | Eric                M. Specter                       |
|                              | Executive                Vice President              |
|                              | Chief                Financial Officer               |

----

**Exhibit      Index**

| **Exhibit                No.** | **Item**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1                            | Stock                Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition                Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown                Traders, Inc. whose names are set forth on the signature pages thereto,                and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,                incorporated by reference to Form 8-K of the Registrant dated June                2,                2005, filed on June 8, 2005. (Exhibit 2.1). |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.1                            | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,                Exhibit 3.1).                                                                                                                                                                                                                                                                                             |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.2                            | Bylaws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999 (File No. 000-07258,                Exhibit 3.2).                                                                                                                                                                                                                                                                                                       |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.1                            | Indenture                between the Company and Wells Fargo Bank, National Association, dated                as                of April 30, 2007, incorporated by reference to Form 8-K of the Registrant                dated April 30, 2007, filed on May 3, 2007.  (Exhibit                4.1).                                                                                                                                                                                                                     |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.2                            | Form                of 1.125% Senior Convertible Note due 2012 (included in Exhibit                4.1)                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1                           | Registration                Rights Agreement among the Company and Banc of America Securities                LLC and                J.P. Morgan Securities Inc., dated as of April 30, 2007, incorporated                by                reference to Form 8-K of the Registrant dated April 30, 2007, filed                on May                3, 2007.  (Exhibit 10.1).                                                                                                                                            |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2                           | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and Bank of America, N.A., dated April 24, 2007, incorporated                by                reference to Form 8-K of the Registrant dated April 25, 2007, filed                on May                1, 2007.  (Exhibit 10.1).                                                                                                                                                                  |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.3                           | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and JPMorgan Chase Bank, National Association, dated April                24,                2007, incorporated by reference to Form 8-K of the Registrant dated                April                25, 2007, filed on May 1, 2007.  (Exhibit                10.2).                                                                                                                               |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.4                           | Convertible                Bond Hedge Transaction Confirmation entered into by and between the                Company and Wachovia Bank, National Association, dated April 24,                2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit 10.3).                                                                                                                                                    |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.5                           | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and Bank of America, N.A., dated April 24, 2007, incorporated by                reference                to Form 8-K of the Registrant dated April 25, 2007, filed on May                1,                2007.  (Exhibit 10.4).                                                                                                                                                           |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.6                           | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and JPMorgan Chase Bank, National Association, dated April 24, 2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit 10.5).                                                                                                                                                      |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.7                           | Issuer                Warrant Transaction Confirmation entered into by and between the                Company                and Wachovia Bank, National Association, dated April 24, 2007,                incorporated by reference to Form 8-K of the Registrant dated April                25,                2007, filed on May 1, 2007.  (Exhibit                10.6).                                                                                                                                             |

----

| **Exhibit                No.** | **Item** |
|--------------------------------|----------|

|   |                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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. |

----