----

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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**

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**Table          of Contents**

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

**TABLE      OF CONTENTS**

|                        |                                                                                                                          | **Page** |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------|----------|
| **PART                I.**  | **FINANCIAL                INFORMATION**                                                                                      |     |
|                        |                                                                                                                          |     |
| **Item                1.**  | **Financial                Statements (Unaudited)**                                                                           | 2        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Balance Sheets                                                                          |     |
|                        | October                29, 2005 and January 29, 2005                                                                          | 2        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Statements of Operations and Comprehensive                Income                        |     |
|                        | Thirteen                weeks ended October 29, 2005 and October 30, 2004                                                     | 3        |
|                        | Thirty-nine                weeks ended October 29, 2005 and October 30, 2004                                                  | 4        |
|                        |                                                                                                                          |     |
|                        | Condensed                Consolidated Statements of Cash Flows                                                                |     |
|                        | Thirty-nine                weeks ended October 29, 2005 and October 30, 2004                                                  | 5        |
|                        |                                                                                                                          |     |
|                        | Notes                to Condensed Consolidated Financial Statements                                                           | 6        |
|                        |                                                                                                                          |     |
| **Item                2.**  | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations** | 20       |
|                        |                                                                                                                          |     |
|                        | Forward-looking                Statements                                                                                     | 20       |
|                        |                                                                                                                          |     |
|                        | Restatement                of Financial Statements                                                                            | 22       |
|                        |                                                                                                                          |     |
|                        | Critical                Accounting Policies                                                                                   | 23       |
|                        |                                                                                                                          |     |
|                        | Recent                Developments                                                                                            | 24       |
|                        |                                                                                                                          |     |
|                        | Results                of Operations                                                                                          | 25       |
|                        |                                                                                                                          |     |
|                        | Liquidity                and Capital Resources                                                                                | 32       |
|                        |                                                                                                                          |     |
|                        | Financing                                                                                                                     | 35       |
|                        |                                                                                                                          |     |
|                        | Market                Risk                                                                                                    | 36       |
|                        |                                                                                                                          |     |
|                        | Impact                of Recent Accounting Pronouncements                                                                     | 37       |
|                        |                                                                                                                          |     |
| **Item                3.**  | **Quantitative                and Qualitative Disclosures About Market Risk**                                                 | 37       |
|                        |                                                                                                                          |     |
| **Item                4.**  | **Controls                and Procedures**                                                                                    | 37       |
|                        |                                                                                                                          |     |
| **PART                II.** | **OTHER                INFORMATION**                                                                                          |     |
|                        |                                                                                                                          |     |
| **Item                1.**  | **Legal                Proceedings**                                                                                          | 38       |
|                        |                                                                                                                          |     |
| **Item                2.**  | **Unregistered                Sales of Equity Securities and Use of Proceeds**                                                | 38       |
|                        |                                                                                                                          |     |
| **Item                6.**  | **Exhibits**                                                                                                                  | 39       |
|                        |                                                                                                                          |     |
|                        | **SIGNATURES**                                                                                                                | 41       |

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**Table          of Contents**

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

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

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

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                         |   | **October                29,** |          | **January                29,** |   |
|----------------------------------------------------------------------------------------------|--------|--------------------------------|---------------|--------------------------------|--------|
| ***(Dollars                in thousands, except share amounts)***                            |   | **2005**                       |          | **2005**                       |   |
|                                                                                         |   | **(Unaudited)**                |          |                           |   |
| **ASSETS**                                                                                   |   |                           |          |                           |   |   |   |
| **Current                assets**                                                            |   |                           |          |                           |   |   |   |
| Cash                and cash equivalents                                                |   | **$**                          | **151,676**   |                           | $      | 273,049 |   |
| Available-for-sale                securities                                            |   |                           | **86,465**    |                           |   | 52,857 |   |
| Merchandise                inventories                                                  |   |                           | **474,484**   |                           |   | 285,120 |   |
| Deferred                advertising                                                     |   |                           | **29,128**    |                           |   | 0 |   |
| Deferred                taxes                                                           |   |                           | **32,489**    |                           |   | 15,500 |   |
| Prepayments                and other                                                    |   |                           | **93,934**    |                           |   | 86,382 |   |
| **Total                current assets**                                                 |   |                           | **868,176**   |                           |   | 712,908 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| Property,                equipment, and leasehold improvements - at cost                |   |                           | **863,287**   |                           |   | 786,028 |   |
| Less                accumulated depreciation and amortization                           |   |                           | **511,885**   |                           |   | 465,365 |   |
| **Net                property, equipment, and leasehold improvements**                  |   |                           | **351,402**   |                           |   | 320,663 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| Trademarks                and other intangible assets                                   |   |                           | **248,908**   |                           |   | 169,818 |   |
| Goodwill                                                                                |   |                           | **153,651**   |                           |   | 66,666 |   |
| Available-for-sale                securities                                            |   |                           | **240**       |                           |   | 240 |   |
| Other                assets                                                             |   |                           | **40,928**    |                           |   | 33,476 |   |
| **Total                assets**                                                         |   | **$**                          | **1,663,305** |                           | $      | 1,303,771 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                |   |                           |          |                           |   |   |   |
| **Current                liabilities**                                                       |   |                           |          |                           |   |   |   |
| Short-term                borrowings                                                    |   | **$**                          | **50,000**    |                           | $      | 0 |   |
| Accounts                payable                                                         |   |                           | **188,879**   |                           |   | 127,819 |   |
| Accrued                expenses                                                         |   |                           | **210,823**   |                           |   | 154,681 |   |
| Income                taxes payable                                                     |   |                           | **13,000**    |                           |   | 0 |   |
| Current                portion - long-term debt                                         |   |                           | **15,249**    |                           |   | 16,419 |   |
| **Total                current liabilities**                                            |   |                           | **477,951**   |                           |   | 298,919 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| Deferred                taxes and other non-current liabilities                         |   |                           | **152,443**   |                           |   | 101,743 |   |
| Long-term                debt                                                           |   |                           | **245,227**   |                           |   | 208,645 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| **Stockholders’                equity**                                                |   |                           |          |                           |   |   |   |
| Common                Stock $.10 par value:                                                  |   |                           |          |                           |   |   |   |
| Authorized                - 300,000,000 shares                                               |   |                           |          |                           |   |   |   |
| Issued                - 133,177,902 shares and 132,063,290 shares, respectively         |   |                           | **13,318**    |                           |   | 13,206 |   |
| Additional                paid-in capital                                               |   |                           | **269,059**   |                           |   | 249,485 |   |
| Treasury                stock at cost - 12,265,993 shares                               |   |                           | **(84,136**   | **)**                          |   | (84,136 | ) |
| Deferred                employee compensation                                           |   |                           | **(15,382**   | **)**                          |   | (8,715 | ) |
| Accumulated                other comprehensive loss                                     |   |                           | **(2**        | **)**                          |   | 0 |   |
| Retained                earnings                                                        |   |                           | **604,827**   |                           |   | 524,624 |   |
| **Total                stockholders’ equity**                                     |   |                           | **787,684**   |                           |   | 694,464 |   |
| **Total                liabilities and stockholders’ equity**                     |   | **$**                          | **1,663,305** |                           | $      | 1,303,771 |   |
|                                                                                         |   |                           |          |                           |   |   |   |
| ***See                Notes to Condensed Consolidated Financial                Statements*** |   |                           |          |                           |   |   |   |

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**Table          of Contents**

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

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**AND      COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                                                            |   | **Thirteen                Weeks Ended** |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|
|                                                                                                                                                            |   | **October                29,**          |        | **October                30,** |   |
| ***(In                thousands, except per share amounts)***                                                                                                   |   | **2005**                                |        | **2004** |   |
|                                                                                                                                                            |   |                                    |        | **(Restated)** |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Net                sales**                                                                                                                                    |   | **$**                                   | **663,322** |   | $ | 541,759 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                                                                      |   |                                    | **461,451** |   |   | 378,533 |   |
| Selling,                general, and administrative expenses                                                                                                    |   |                                    | **181,275** |   |   | 149,769 |   |
| Expenses                related to cost reduction plan                                                                                                          |   |                                    | **0**       |   |   | 605 |   |
| **Total                operating expenses**                                                                                                                     |   |                                    | **642,726** |   |   | 528,907 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Income                from operations**                                                                                                                       |   |                                    | **20,596**  |   |   | 12,852 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| Other                income                                                                                                                                     |   |                                    | **1,754**   |   |   | 783 |   |
| Interest                expense                                                                                                                                 |   |                                    | **(4,797**  | **)** |   | (3,876 | ) |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| Income                before income taxes                                                                                                                       |   |                                    | **17,553**  |   |   | 9,759 |   |
| Income                tax provision                                                                                                                             |   |                                    | **6,791**   |   |   | 3,406 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Net                income**                                                                                                                                   |   |                                    | **10,762**  |   |   | 6,353 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Other                comprehensive (loss)/income, net of tax**                                                                                                |   |                                    |        |   |   |   |   |
| Unrealized                (losses)/gains on available-for-sale securities, net of income tax                benefit/(provision) of $1 in 2005 and ($49) in 2004 |   |                                    | **(2**      | **)** |   | 77 |   |
| Reclassification                of amortization of deferred loss on termination of derivative,                net of income tax benefit of $6 in 2004           |   |                                    | **0**       |   |   | 11 |   |
| Total                other comprehensive (loss)/income, net of tax                                                                                              |   |                                    | **(2**      | **)** |   | 88 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Comprehensive                income**                                                                                                                         |   | **$**                                   | **10,760**  |   | $ | 6,441 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Basic                net income per share**                                                                                                                   |   | **$**                                   | **.09**     |   | $ | .05 |   |
|                                                                                                                                                            |   |                                    |        |   |   |   |   |
| **Diluted                net income per share**                                                                                                                 |   | **$**                                   | **.09**     |   | $ | .05 |   |
|                                                                                                                                                            |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                                                    |   |                                    |        |   |   |   |   |

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**Table          of Contents**

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

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**AND      COMPREHENSIVE INCOME**

**(Unaudited)**

|                                                                                                                                                                  |   | **Thirty-nine                Weeks Ended** |          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------------|
|                                                                                                                                                                  |   | **October                29,**             |          | **October                30,** |   |
| ***(In                thousands, except per share amounts)***                                                                                                         |   | **2005**                                   |          | **2004** |   |
|                                                                                                                                                                  |   |                                       |          | **(Restated)** |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Net                sales**                                                                                                                                          |   | **$**                                      | **1,954,937** |   | $ | 1,746,234 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                                                                            |   |                                       | **1,331,761** |   |   | 1,211,820 |   |
| Selling,                general, and administrative expenses                                                                                                          |   |                                       | **489,280**   |   |   | 431,260 |   |
| Expenses                related to cost reduction plan                                                                                                                |   |                                       | **0**         |   |   | 605 |   |
| **Total                operating expenses**                                                                                                                           |   |                                       | **1,821,041** |   |   | 1,643,685 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Income                from operations**                                                                                                                             |   |                                       | **133,896**   |   |   | 102,549 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| Other                income                                                                                                                                           |   |                                       | **6,741**     |   |   | 1,592 |   |
| Interest                expense                                                                                                                                       |   |                                       | **(13,434**   | **)** |   | (11,639 | ) |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| Income                before income taxes                                                                                                                             |   |                                       | **127,203**   |   |   | 92,502 |   |
| Income                tax provision                                                                                                                                   |   |                                       | **47,000**    |   |   | 32,841 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Net                income**                                                                                                                                         |   |                                       | **80,203**    |   |   | 59,661 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Other                comprehensive (loss)/income, net of tax**                                                                                                      |   |                                       |          |   |   |   |   |
| Unrealized                (losses)/gains on available-for-sale securities, net of income tax                benefit/(provision) of $1 in 2005 and ($147) in 2004      |   |                                       | **(2**        | **)** |   | 230 |   |
| Reclassification                of amortization of deferred loss on termination of derivative, net                of                income tax benefit of $69 in 2004 |   |                                       | **0**         |   |   | 128 |   |
| Total                other comprehensive (loss)/income, net of tax                                                                                                    |   |                                       | **(2**        | **)** |   | 358 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Comprehensive                income**                                                                                                                               |   | **$**                                      | **80,201**    |   | $ | 60,019 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Basic                net income per share**                                                                                                                         |   | **$**                                      | **.67**       |   | $ | .52 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| **Diluted                net income per share**                                                                                                                       |   | **$**                                      | **.61**       |   | $ | .48 |   |
|                                                                                                                                                                  |   |                                       |          |   |   |   |   |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                                                          |   |                                       |          |   |   |   |   |

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**Table          of Contents**

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

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                         |   | **Thirty-nine                Weeks Ended** |         |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------------|
|                                                                                                                         |   | **October                29,**             |         | **October                30,** |   |
| ***(In                thousands)***                                                                                          |   | **2005**                                   |         | **2004** |   |
|                                                                                                                         |   |                                       |         | **(Restated)** |   |
| **Operating                activities**                                                                                      |   |                                       |         |   |   |   |   |
| Net                income                                                                                               |   | **$**                                      | **80,203**   |   | $ | 59,661 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:              |   |                                       |         |   |   |   |   |
| Depreciation                and amortization                                                                            |   |                                       | **65,036**   |   |   | 57,681 |   |
| Deferred                income taxes                                                                                    |   |                                       | **(4,420**   | **)** |   | 3,536 |   |
| Tax                benefit related to stock plans                                                                       |   |                                       | **2,365**    |   |   | 4,187 |   |
| Net                (gain)/loss from disposition of capital assets                                                       |   |                                       | **(785**     | **)** |   | 646 |   |
| Gain                from securitization of Catherines portfolio                                                         |   |                                       | **(759**     | **)** |   | 0 |   |
| Loss                on sales of available-for-sale securities                                                           |   |                                       | **0**        |   |   | 185 |   |
| Changes                in operating assets and liabilities:                                                                  |   |                                       |         |   |   |   |   |
| Merchandise                inventories                                                                                       |   |                                       | **(118,126** | **)** |   | (68,960 | ) |
| Accounts                payable                                                                                              |   |                                       | **48,691**   |   |   | 31,467 |   |
| Deferred                advertising                                                                                          |   |                                       | **(17,249**  | **)** |   | 0 |   |
| Prepayments                and other                                                                                         |   |                                       | **8,902**    |   |   | (19,649 | ) |
| Accrued                expenses and other                                                                                    |   |                                       | **28,183**   |   |   | 18,862 |   |
| Income                taxes payable                                                                                          |   |                                       | **8,963**    |   |   | 828 |   |
| **Net                cash provided by operating activities**                                                            |   |                                       | **101,004**  |   |   | 88,444 |   |
|                                                                                                                         |   |                                       |         |   |   |   |   |
| **Investing                activities**                                                                                      |   |                                       |         |   |   |   |   |
| Investment                in capital assets                                                                             |   |                                       | **(68,177**  | **)** |   | (42,078 | ) |
| Proceeds                from sales of capital assets                                                                    |   |                                       | **2,432**    |   |   | 0 |   |
| Proceeds                from sales of available-for-sale securities                                                     |   |                                       | **17,714**   |   |   | 45,571 |   |
| Gross                purchases of available-for-sale securities                                                         |   |                                       | **(51,325**  | **)** |   | (30,887 | ) |
| Acquisition                of Crosstown Traders, Inc., net of cash acquired                                             |   |                                       | **(256,702** | **)** |   | 0 |   |
| Purchase                of Catherines                receivables portfolio                                              |   |                                       | **(56,582**  | **)** |   | 0 |   |
| Securitization                of Catherines                receivables portfolio                                        |   |                                       | **56,582**   |   |   | 0 |   |
| Securitization                of Crosstown apparel-related receivables                                                  |   |                                       | **50,000**   |   |   | 0 |   |
| Increase                in other assets                                                                                 |   |                                       | **(2,455**   | **)** |   | (5,610 | ) |
| **Net                cash used by investing activities**                                                                |   |                                       | **(308,513** | **)** |   | (33,004 | ) |
|                                                                                                                         |   |                                       |         |   |   |   |   |
| **Financing                activities**                                                                                      |   |                                       |         |   |   |   |   |
| Proceeds                from short-term borrowings                                                                      |   |                                       | **261,311**  |   |   | 150,298 |   |
| Repayments                of short-term borrowings                                                                      |   |                                       | **(211,311** | **)** |   | (150,298 | ) |
| Proceeds                from long-term borrowings                                                                       |   |                                       | **50,000**   |   |   | 13,098 |   |
| Repayments                of long-term borrowings                                                                       |   |                                       | **(18,480**  | **)** |   | (12,813 | ) |
| Payments                of deferred financing costs                                                                     |   |                                       | **(1,371**   | **)** |   | (350 | ) |
| Proceeds                from issuance of common stock                                                                   |   |                                       | **5,987**    |   |   | 23,722 |   |
| **Net                cash provided by financing activities**                                                            |   |                                       | **86,136**   |   |   | 23,657 |   |
|                                                                                                                         |   |                                       |         |   |   |   |   |
| **Increase                (decrease) in cash and cash equivalents**                                                     |   |                                       | **(121,373** | **)** |   | 79,097 |   |
| Cash                and cash equivalents, beginning of period                                                           |   |                                       | **273,049**  |   |   | 123,781 |   |
| **Cash                and cash equivalents, end of period**                                                             |   | **$**                                      | **151,676**  |   | $ | 202,878 |   |
|                                                                                                                         |   |                                       |         |   |   |   |   |
| **Non-cash                financing and investing activities**                                                               |   |                                       |         |   |   |   |   |
| Equipment                acquired through capital leases                                                                |   | **$**                                      | **3,892**    |   | $ | 5,399 |   |
|                                                                                                                         |   |                                       |         |   |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
| ***See                Notes to Condensed Consolidated Financial                Statements***                                 |   |                                       |         |   |   |   |   |

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**Table          of Contents**

**CHARMING              SHOPPES, INC. AND SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

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

**“Note      3. Acquisition of Crosstown Traders, Inc.”**

***Segment      Reporting***

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

***Revenue      Recognition***

*“Revenue      Recognition in the Financial Statements,”*

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**Table          of Contents**

**CHARMING            SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

***Revenue      Recognition (Continued)***

***Inventories***

***Deferred      Advertising (Catalog)***

*“Reporting      on Advertising Costs,” *

***Cash      Consideration Received from Vendors***

*“Accounting      by a Customer (Including a Reseller) for Cash Consideration Received from a      Vendor.”*

***Stock-based      Compensation***

*Accounting      for Stock Issued to Employees*

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**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

*“Accounting      for Stock-based Compensation:”*

|                                                                                                                                             |   | **Thirteen                  Weeks Ended** |   | **Thirty-nine                  Weeks Ended** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|----------------------------------------------|--------|
|  ***(In                  thousands, except per share amounts)***                                                                            |   | **October                  29,****2005**  |   | **October                  30,****2004**     |   | **October                  29,****2005** |   | **October                  30,****2004** |   |
|                                                                                                                                             |   |                                      |   | **(Restated)**                               |   |   |   | **(Restated)** |   |
|                                                                                                                                             |   |                                      |   |                                         |   |   |   |   |   |   |   |   |   |
| Net                  income as reported                                                                                                     |   | $                                         | 10,762 |                                         | $      | 6,353 |   | $ | 80,203 |   | $ | 59,661 |   |
| Add                  stock-based employee compensation using intrinsic value method,                  net of                  income taxes  |   |                                      | 1,140  |                                         |   | 317 |   |   | 3,033 |   |   | 1,081 |   |
| Less                  stock-based employee compensation using fair value method, net                  of income                  taxes      |   |                                      | (1,159 | )                                            |   | (982 | ) |   | (3,323 | ) |   | (2,780 | ) |
| Pro                  forma net income                                                                                                       |   | $                                         | 10,743 |                                         | $      | 5,688 |   | $ | 79,913 |   | $ | 57,962 |   |
|                                                                                                                                             |   |                                      |   |                                         |   |   |   |   |   |   |   |   |   |
| Basic                  net income per share:                                                                                                     |   |                                      |   |                                         |   |   |   |   |   |   |   |   |   |
| As                  reported                                                                                                                |   | $                                         | .09    |                                         | $      | .05 |   | $ | .67 |   | $ | .52 |   |
| Pro                  forma                                                                                                                  |   |                                      | .09    |                                         |   | .05 |   |   | .67 |   |   | .50 |   |
| Diluted                  net income per share:                                                                                                   |   |                                      |   |                                         |   |   |   |   |   |   |   |   |   |
| As                  reported                                                                                                                |   |                                      | .09    |                                         |   | .05 |   |   | .61 |   |   | .48 |   |
| Pro                  forma                                                                                                                  |   |                                      | .09    |                                         |   | .05 |   |   | .61 |   |   | .46 |   |

**Note      2. Restatement of Financial Statements**

**“Item      8. Financial Statements and Supplementary Data; Note 2. Restatement of Financial      Statements”**

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      2. Restatement of Financial Statements (Continued)**

|                                                                             |   | **Thirteen                Weeks Ended October 30, 2004** |    |
|----------------------------------------------------------------------------------|--------|----------------------------------------------------------|---------|
|                                                                             |   | **As                Previously**                         |    |   |   | **As** |   |
| ***(In                thousands, except per share amounts)***                    |   | **Reported**                                             |    | **Adjustments** |   | **Restated** |   |
|                                                                             |   |                                                     |    |   |   |   |   |   |   |   |
| **Condensed                Consolidated Statement of Operations:**               |   |                                                     |    |   |   |   |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses  |   | $                                                        | 377,457 |   | $ | 1,076 |   | $ | 378,533 |   |
| Income                tax provision                                         |   |                                                     | 3,803   |   |   | (397 | ) |   | 3,406 |   |
| Net                income                                                   |   |                                                     | 7,032   |   |   | (679 | ) |   | 6,353 |   |
| Basic                net income per share                                   |   | $                                                        | .06     |   | $ | (.01 | ) | $ | .05 |   |
| Diluted                net income per share                                 |   |                                                     | .06     |   |   | (.01 | ) |   | .05 |   |

|                                                                             |   | **Thirty-nine                Weeks Ended October 30, 2004** |      |
|----------------------------------------------------------------------------------|--------|-------------------------------------------------------------|-----------|
|                                                                             |   | **As                Previously**                            |      |   |   | **As** |   |
| ***(In                thousands, except per share amounts)***                    |   | **Reported**                                                |      | **Adjustments** |   | **Restated** |   |
|                                                                             |   |                                                        |      |   |   |   |   |   |   |   |
| **Condensed                Consolidated Statement of Operations:**               |   |                                                        |      |   |   |   |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses  |   | $                                                           | 1,208,592 |   | $ | 3,228 |   | $ | 1,211,820 |   |
| Income                tax provision                                         |   |                                                        | 34,032    |   |   | (1,191 | ) |   | 32,841 |   |
| Net                income                                                   |   |                                                        | 61,698    |   |   | (2,037 | ) |   | 59,661 |   |
| Basic                net income per share                                   |   | $                                                           | .53       |   | $ | (.01 | ) | $ | .52 |   |
| Diluted                net income per share                                 |   |                                                        | .49       |   |   | (.01 | ) |   | .48 |   |
|                                                                             |   |                                                        |      |   |   |   |   |   |   |   |

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      2. Restatement of Financial Statements (Continued)**

|                                                                                                                           |   | **Thirty-nine                Weeks Ended October 30, 2004** |    |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|---------|
|                                                                                                                           |   | **As                Previously**                            |    |   |   | **As** |   |
| ***(In                thousands)***                                                                                            |   | **Reported****(1)**                                         |    | **Adjustments** |   | **Restated** |   |
|                                                                                                                           |   |                                                        |    |   |   |   |   |   |   |   |
| **Condensed                Consolidated Statement of Cash Flows:**                                                             |   |                                                        |    |   |   |   |   |   |   |   |
| **Operating                activities:**                                                                                       |   |                                                        |    |   |   |   |   |   |   |   |
| Net                income                                                                                                 |   | $                                                           | 61,698  |   | $ | (2,037 | ) | $ | 59,661 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:                |   |                                                        |    |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                              |   |                                                        | 51,426  |   |   | 6,255 |   |   | 57,681 |   |
| Deferred                income taxes                                                                                      |   |                                                        | 4,727   |   |   | (1,191 | ) |   | 3,536 |   |
| Changes                in operating assets and liabilities:                                                                    |   |                                                        |    |   |   |   |   |   |   |   |
| Accrued                expenses and other                                                                                      |   |                                                        | 14,987  |   |   | 3,875 |   |   | 18,862 |   |
| Net                cash provided by operating activities                                                                  |   |                                                        | 81,542  |   |   | 6,902 |   |   | 88,444 |   |
|                                                                                                                           |   |                                                        |    |   |   |   |   |   |   |   |
| **Investing                activities:**                                                                                       |   |                                                        |    |   |   |   |   |   |   |   |
| Investment                in capital assets                                                                               |   |                                                        | (35,176 | ) |   | (6,902 | ) |   | (42,078 | ) |
| Net                cash used by investing activities                                                                      |   |                                                        | (26,102 | ) |   | (6,902 | ) |   | (33,004 | ) |
| *___________________*                                                                                                          |   |                                                        |    |   |   |   |   |   |   |   |
| *(1)* *Certain                amounts have been reclassified to conform to the current-year                presentation.* |

**Note      3. Acquisition of Crosstown Traders, Inc.**

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

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      3. Acquisition of Crosstown Traders, Inc. (Continued)**

*Goodwill      and Other Intangible Assets,*

|                                                               |   | **Purchase**   |    |
|--------------------------------------------------------------------|--------|----------------|---------|
|                                                               |   | **Price**      |    |
| ***(In                thousands)***                                |   | **Allocation** |    |
|                                                               |   |           |    |   |
| Fair                value of assets acquired                  |   | $              | 177,256 |   |
| Fair                value of liabilities acquired             |   |           | (56,598 | ) |
| Intangible                assets subject to amortization      |   |           | 10,700  |   |
| Intangible                assets not subject to amortization  |   |           | 70,000  |   |
| Deferred                tax effect of acquisition             |   |           | (25,826 | ) |
| Goodwill                                                      |   |           | 86,985  |   |
| Total                purchase price                           |   | $              | 262,517 |   |

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

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      3. Acquisition of Crosstown Traders, Inc. (Continued)**

|                                                          |   | **Thirteen**                   |    |                                       |   |
|---------------------------------------------------------------|--------|--------------------------------|---------|--------------------------------------------|--------|
|                                                          |   | **Weeks                Ended** |    | **Thirty-nine                Weeks Ended** |   |
|                                                          |   | **October                30,** |    | **October                29,**             |   | **October                30,** |   |
| ***(In                thousands, except per share amounts)*** |   | **2004**                       |    | **2005**                                   |   | **2004** |   |
|                                                          |   | **(Restated)**                 |    |                                       |   | **(Restated)** |   |
|                                                          |   |                           |    |                                       |   |   |   |   |   |   |
| Net                sales                                 |   | $                              | 628,702 |                                       | $      | 2,103,952 |   | $ | 2,032,800 |   |
| Net                income                                |   |                           | 6,048   |                                       |   | 77,150 |   |   | 57,948 |   |
|                                                          |   |                           |    |                                       |   |   |   |   |   |   |
| Net                income per share:                          |   |                           |    |                                       |   |   |   |   |   |   |
| Basic                                                         |   | $                              | .05     |                                       | $      | .65 |   | $ | .50 |   |
| Diluted                                                       |   |                           | .05     |                                       |   | .59 |   |   | .46 |   |

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

|                                                                                                                                                    |   | **October                29,** |    | **January                29,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------------------------------|--------|
| ***(In                thousands)***                                                                                                                     |   | **2005**                       |    | **2005**                       |   |
|                                                                                                                                                    |   |                           |    |                           |   |   |   |
| Trademarks,                tradenames, and internet domain names                                                                                   |   | $                              | 238,800 |                           | $      | 168,800 |   |
| Customer                lists, customer relationships, and covenant not to compete                                                                 |   |                           | 14,000  |                           |   | 3,300 |   |
| Total                at cost                                                                                                                       |   |                           | 252,800 |                           |   | 172,100 |   |
| Less                accumulated amortization of customer lists, customer relationships,                and                covenant not to compete  |   |                           | 3,892   |                           |   | 2,282 |   |
| Net                trademarks and other intangible assets                                                                                          |   | $                              | 248,908 |                           | $      | 169,818 |   |

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

|                                                               |   | **October                29,** |    | **January                29,** |   |
|--------------------------------------------------------------------|--------|--------------------------------|---------|--------------------------------|--------|
| ***(In                thousands)***                                |   | **2005**                       |    | **2005**                       |   |
|                                                               |   |                           |    |                           |   |   |   |
| **Short-term                borrowings**                           |   |                           |    |                           |   |   |   |
| Revolving                credit facility                      |   | $                              | 50,000  |                           | $      | 0 |   |
|                                                               |   |                           |    |                           |   |   |   |
| **Long-term                debt**                                  |   |                           |    |                           |   |   |   |
| 4.75%                Senior Convertible Notes, due June 2012  |   | $                              | 150,000 |                           | $      | 150,000 |   |
| Revolving                credit facility                      |   |                           | 50,000  |                           |   | 0 |   |
| Capital                lease obligations                      |   |                           | 27,871  |                           |   | 34,825 |   |
| 6.07%                mortgage note, due October 2014          |   |                           | 12,404  |                           |   | 12,821 |   |
| 6.53%                mortgage note, due November 2012         |   |                           | 9,800   |                           |   | 10,850 |   |
| 7.77%                mortgage note, due December 2011         |   |                           | 9,183   |                           |   | 9,564 |   |
| Variable                rate mortgage note, due March 2006    |   |                           | 0       |                           |   | 5,605 |   |
| Other                long-term debt                           |   |                           | 1,218   |                           |   | 1,399 |   |
| Total                long-term debt                           |   |                           | 260,476 |                           |   | 225,064 |   |
| Less                current portion                           |   |                           | 15,249  |                           |   | 16,419 |   |
| Long-term                debt                                 |   | $                              | 245,227 |                           | $      | 208,645 |   |

**“Note      3. Acquisition of Crosstown Traders, Inc.”**

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**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      6. Stockholders’ Equity**

|                                                                                |   | **Thirty-nine**                |    |
|-------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                |   | **Weeks                Ended** |    |
|                                                                                |   | **October                29,** |    |
| ***(Dollars                in thousands)***                                         |   | **2005**                       |    |
|                                                                                |   |                           |    |   |
| Total                stockholders’ equity, beginning of period                |   | $                              | 694,464 |   |
| Net                income                                                           |   |                           | 80,203  |   |
| Issuance                of common stock (1,114,612 shares)                          |   |                           | 5,987   |   |
| Tax                benefit related to stock plans                                   |   |                           | 2,365   |   |
| Unrealized                losses on available-for-sale securities, net of tax  |   |                           | (2      | ) |
| Amortization                of deferred compensation expense                   |   |                           | 4,667   |   |
| Total                stockholders’ equity, end of period                      |   | $                              | 787,684 |   |

**Note      7. Customer Loyalty Card Programs**

**Note      8. Net Income Per Share**

|                                                                                                                   |   | **Thirteen                Weeks Ended** |    | **Thirty-nine                Weeks Ended** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|--------------------------------------------|--------|
|                                                                                                                   |   | **October                29,**          |    | **October                30,**             |   | **October                29,** |   | **October                30,** |   |
| ***(In                thousands)***                                                                                    |   | **2005**                                |    | **2004**                                   |   | **2005** |   | **2004** |   |
|                                                                                                                   |   |                                    |    | **(Restated)**                             |   |   |   | **(Restated)** |   |
|                                                                                                                   |   |                                    |    |                                       |   |   |   |   |   |   |   |   |   |
| Basic                weighted average common shares outstanding                                                   |   |                                    | 120,102 |                                       |   | 117,217 |   |   | 119,513 |   |   | 115,474 |   |
| Dilutive                effect of assumed conversion of convertible notes                                         |   |                                    | 15,182  |                                       |   | 0 |   |   | 15,182 |   |   | 15,182 |   |
| Dilutive                effect of stock options and awards                                                        |   |                                    | 2,268   |                                       |   | 1,416 |   |   | 1,939 |   |   | 1,744 |   |
| Diluted                weighted average common shares and equivalents outstanding                                 |   |                                    | 137,552 |                                       |   | 118,633 |   |   | 136,634 |   |   | 132,400 |   |
|                                                                                                                   |   |                                    |    |                                       |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                         |   | $                                       | 10,762  |                                       | $      | 6,353 |   | $ | 80,203 |   | $ | 59,661 |   |
| Decrease                in interest expense from assumed conversion of notes, net of income                taxes  |   |                                    | 1,128   |                                       |   | 0 |   |   | 3,385 |   |   | 3,404 |   |
| Net                income used to determine diluted net income per share                                          |   | $                                       | 11,890  |                                       | $      | 6,353 |   | $ | 83,588 |   | $ | 63,065 |   |

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**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      8. Net Income Per Share (Continued)**

|                                                                                                                                                     |   | **Thirteen                Weeks Ended** |   | **Thirty-nine                Weeks Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                                                     |   | **October                29,**          |   | **October                30,**             |   | **October                29,** |   | **October                30,** |   |
| ***(In                thousands, except per share amounts)***                                                                                            |   | **2005**                                |   | **2004**                                   |   | **2005** |   | **2004** |   |
|                                                                                                                                                     |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Options                with weighted average exercise price greater than market price, excluded                from computation of net income per share: |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Number                of shares                                                                                                                     |   |                                    | 0      |                                       |   | 446 |   |   | 0 |   |   | 432 |   |
| Weighted                average exercise price per share                                                                                            |   | $                                       | 0.00   |                                       | $      | 8.23 |   | $ | 0.00 |   | $ | 8.28 |   |

**Note      9. Income Taxes**

**Note      10. Asset Securitization**

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**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      10. Asset Securitization (Continued)**

**Note      11. Segment Reporting**

**,      **

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

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      11. Segment Reporting (Continued)**

|                                                                                                                                               |   | **Retail** |      | **Direct-to-**      |   | **Corporate**                |   |             |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|-----------|---------------------|--------|------------------------------|--------|------------------|---------|
| ***(in                thousands)***                                                                                                                |   | **Stores** |      | **Consumer****(1)** |   | **and                Other** |   | **Consolidated** |    |
|                                                                                                                                               |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| **Thirteen                weeks ended October 29, 2005**                                                                                           |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| Net                sales                                                                                                                      |   | $          | 568,922   |                | $      | 93,613                       |   | $                | 787     |   | $ | 663,322 |   |
| Depreciation                and amortization                                                                                                  |   |       | 10,877    |                |   | 440                          |   |             | 11,824  |   |   | 23,141 |   |
| Income                before interest and taxes                                                                                               |   |       | 30,213    |                |   | 2,444                        |   |             | (10,307 | ) |   | 22,350 |   |
| Interest                expense                                                                                                               |   |       |      |                |   |                         |   |             | (4,797  | ) |   | (4,797 | ) |
| Income                tax provision                                                                                                           |   |       |      |                |   |                         |   |             | (6,791  | ) |   | (6,791 | ) |
| Net                income                                                                                                                     |   |       | 30,213    |                |   | 2,444                        |   |             | (21,895 | ) |   | 10,762 |   |
| Capital                expenditures                                                                                                           |   |       | 23,398    |                |   | 1,048                        |   |             | 6,338   |   |   | 30,784 |   |
|                                                                                                                                               |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| **Thirty-nine                weeks ended October 29, 2005**                                                                                        |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| Net                sales                                                                                                                      |   | $          | 1,810,907 |                | $      | 143,052                      |   | $                | 978     |   | $ | 1,954,937 |   |
| Depreciation                and amortization                                                                                                  |   |       | 31,159    |                |   | 717                          |   |             | 33,160  |   |   | 65,036 |   |
| Income                before interest and taxes                                                                                               |   |       | 162,455   |                |   | 2,510                        |   |             | (24,328 | ) |   | 140,637 |   |
| Interest                expense                                                                                                               |   |       |      |                |   |                         |   |             | (13,434 | ) |   | (13,434 | ) |
| Income                tax provision                                                                                                           |   |       |      |                |   |                         |   |             | (47,000 | ) |   | (47,000 | ) |
| Net                income                                                                                                                     |   |       | 162,455   |                |   | 2,510                        |   |             | (84,762 | ) |   | 80,203 |   |
| Capital                expenditures                                                                                                           |   |       | 51,249    |                |   | 1,345                        |   |             | 15,583  |   |   | 68,177 |   |
|                                                                                                                                               |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| **As                of October 29, 2005**                                                                                                          |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| Total                assets                                                                                                                   |   | $          | 852,798   |                | $      | 316,061                      |   | $                | 494,446 |   | $ | 1,663,305 |   |
|                                                                                                                                               |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| **Thirteen                weeks ended October 30, 2004****(2)**                                                                                    |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| Net                sales                                                                                                                      |   | $          | 540,825   |                |   |                         |   | $                | 934     |   | $ | 541,759 |   |
| Depreciation                and amortization                                                                                                  |   |       | 10,295    |                |   |                         |   |             | 8,833   |   |   | 19,128 |   |
| Income                before interest and taxes                                                                                               |   |       | 25,181    |                |   |                         |   |             | (11,546 | ) |   | 13,635 |   |
| Interest                expense                                                                                                               |   |       |      |                |   |                         |   |             | (3,876  | ) |   | (3,876 | ) |
| Income                tax provision                                                                                                           |   |       |      |                |   |                         |   |             | (3,406  | ) |   | (3,406 | ) |
| Net                income                                                                                                                     |   |       | 25,181    |                |   |                         |   |             | (18,828 | ) |   | 6,353 |   |
| Capital                expenditures                                                                                                           |   |       | 12,269    |                |   |                         |   |             | 5,924   |   |   | 18,193 |   |
|                                                                                                                                               |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| **Thirty-nine                weeks ended October 30, 2004****(2)**** **                                                                       |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| Net                sales                                                                                                                      |   | $          | 1,744,948 |                |   |                         |   | $                | 1,286   |   | $ | 1,746,234 |   |
| Depreciation                and amortization                                                                                                  |   |       | 32,384    |                |   |                         |   |             | 25,297  |   |   | 57,681 |   |
| Income                before interest and taxes                                                                                               |   |       | 132,439   |                |   |                         |   |             | (28,298 | ) |   | 104,141 |   |
| Interest                expense                                                                                                               |   |       |      |                |   |                         |   |             | (11,639 | ) |   | (11,639 | ) |
| Income                tax provision                                                                                                           |   |       |      |                |   |                         |   |             | (32,841 | ) |   | (32,841 | ) |
| Net                income                                                                                                                     |   |       | 132,439   |                |   |                         |   |             | (72,778 | ) |   | 59,661 |   |
| Capital                expenditures                                                                                                           |   |       | 23,537    |                |   |                         |   |             | 18,541  |   |   | 42,078 |   |
| *____________________*                                                                                                                             |   |       |      |                |   |                         |   |             |    |   |   |   |   |
| *(1)* *From                date of acquisition of Crosstown Traders, Inc. on June 2,                2005.*                                    |
| *(2)* *Results                have been restated - see****“Note                2. Restatement of Financial Statements”****above.* |

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**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

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

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

*“Share-Based      Payment”*
*“Statement      of Cash Flows.”*
**“**
**Item      8. Financial Statements and Supplementary Data; Note 1. Summary of Significant      Accounting Policies”**

*“Share-Based      Payment,”*
*“Amendment      to Rule 4-01(a) of Regulation S-X Regarding the Compliance Date for Financial      Accounting Standards No. 123 (revised 2004), Share-Based      Payment”*

*“Transition      Election Related to Accounting for the Tax Effects of Share-Based Payment      Awards.”*

----

**Table          of Contents**

**CHARMING          SHOPPES, INC. AND SUBSIDIARIES**

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

**(Unaudited)**

**Note      12. Impact of Recent Accounting Pronouncements (Continued)**

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

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

*“Determining      the Amortization Period for Leasehold Improvements.”*

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

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**Table          of Contents**

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

**“RECENT      DEVELOPMENTS”**
**“CRITICAL      ACCOUNTING POLICIES”**

**FORWARD****-LOOKING      STATEMENTS**

| ·   | Our                business is dependent upon our being able 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 industry is 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. with the operations of Charming Shoppes, Inc. In addition,                we cannot assure the successful implementation of our business plan                for                Crosstown Traders, Inc. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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**Table          of Contents**

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

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

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

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

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

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

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

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

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

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

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

| ·   | The                carrying amount and/or useful life of intangible assets related to                acquisitions are subject to periodic valuation tests. An adverse                change in                interest rates or other factors could have a significant impact on                the                results of the valuation tests, resulting in a write-down of the                carrying                value or acceleration of amortization of acquired intangible assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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**Table          of Contents**

| ·   | Pursuant                to Section 404 of the Sarbanes-Oxley Act of 2002, we are required                to                include our assessment of the effectiveness of our internal control                over                financial reporting in our annual reports. Our independent registered                public accounting firm is also required to 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. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**RESTATEMENT****OF      FINANCIAL STATEMENTS**

**“Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations; RESTATEMENT OF FINANCIAL STATEMENTS”**

**“Item      1. Financial Statements; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS      (Unaudited); Note 2. Restatement of Financial Statements”**
** **

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**Table          of Contents**

**CRITICAL****ACCOUNTING POLICIES**

***Segment      Reporting***

**“RECENT      DEVELOPMENTS”**
**,      **
**“Item      1. Notes To Condensed Consolidated Financial Statements (Unaudited); Note 11.      Segment Reporting”**

***Inventories***

***Revenue      Recognition***

*“Revenue      Recognition in the Financial Statements,”*

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**Table          of Contents**

***Deferred      Advertising Costs***

catalog      is      mailed. These capitalized costs are subsequently amortized as a component of      cost of goods sold, buying, catalog, and occupancy expenses over the expected      sales realization cycle, generally within one to six months. Our initial      estimation of the expected sales realization cycle for a particularcatalog      merchandise offering is based on, among other possible considerations, our      historical sales and sell-through experience with similar catalog      merchandise offerings, our understanding of then-prevailing fashion trends      and      influences, our assessment of prevailing economic conditions, and various      competitive factors. We continually track our subsequent sales realization,      compile customer feedback for indications of future performance, reassess the      marketplace, compare our findings to our previous estimate, and adjust our      amortization accordingly.

**RECENT****DEVELOPMENTS**

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

**"FINANCING;      **
***Revolving      Credit Facility***
**"**

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**Table          of Contents**

***Hurricane      Katrina***

***VISA/MasterCard      Antitrust Litigation***

**RESULTS****OF OPERATIONS**

|                                                                                                                                                                  |   |                                           |   | **Percentage**                 |   |                                              |   | **Percentage**                 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|--------------------------------|--------|---------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                                                  |   | **Thirteen                Weeks Ended****(1)** |   | **Change**                     |   | **Thirty-nine                Weeks Ended****(1)** |   | **Change**                     |   |
|                                                                                                                                                                  |   | **October                29,**                 |   | **October                30,** |   | **From                Prior**                     |   | **October                29,** |   | **October                30,** |   | **From                Prior** |   |
|                                                                                                                                                                  |   | **2005****(2)**                                |   | **2004**                       |   | **Period**                                        |   | **2005****(2)**                |   | **2004** |   | **Period** |   |
|                                                                                                                                                                  |   |                                           |   | **(Restated)**                 |   |                                              |   |                           |   | **(Restated)** |   |   |   |
|                                                                                                                                                                  |   |                                           |   |                           |   |                                              |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                                                                                                         |   |                                           | 100.0  | %                              |   | 100.0                                             | %      |                           | 22.4   | % |   | 100.0 | % |   | 100.0 | % |   | 12.0 | % |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                                                                       |   |                                           | 69.6   |                           |   | 69.9                                              |   |                           | 21.9   |   |   | 68.1 |   |   | 69.4 |   |   | 9.9 |   |
| Selling,                general, and administrative expenses                                                                                                     |   |                                           | 27.3   |                           |   | 27.6                                              |   |                           | 21.0   |   |   | 25.0 |   |   | 24.7 |   |   | 13.5 |   |
| Income                from operations                                                                                                                            |   |                                           | 3.1    |                           |   | 2.4                                               |   |                           | 60.3   |   |   | 6.8 |   |   | 5.9 |   |   | 30.6 |   |
| Other                income                                                                                                                                      |   |                                           | 0.3    |                           |   | 0.1                                               |   |                           | 124.0  |   |   | 0.3 |   |   | 0.1 |   |   | 323.4 |   |
| Interest                expense                                                                                                                                  |   |                                           | 0.7    |                           |   | 0.7                                               |   |                           | 23.8   |   |   | 0.7 |   |   | 0.7 |   |   | 15.4 |   |
| Income                tax provision                                                                                                                              |   |                                           | 1.0    |                           |   | 0.6                                               |   |                           | 99.4   |   |   | 2.4 |   |   | 1.9 |   |   | 43.1 |   |
| Net                income                                                                                                                                        |   |                                           | 1.6    |                           |   | 1.2                                               |   |                           | 69.4   |   |   | 4.1 |   |   | 3.4 |   |   | 34.4 |   |
| ____________________                                                                                                                                                  |   |                                           |   |                           |   |                                              |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| *(1)* *Results                may not add due to rounding.*                                                                                                      |
| *(2)* *Includes                the results of operations of Crosstown Traders, Inc. from the date                of                acquisition on June 2, 2005.* |

|                                                                                                                                                                  |   | **Thirteen                Weeks Ended** |   | **Thirty-nine                Weeks Ended** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                                                                  |   | **October                29,**          |   | **October                30,**             |   | **October                29,** |   | **October                30,** |   |
| ***(In                millions)***                                                                                                                                    |   | **2005**                                |   | **2004**                                   |   | **2005** |   | **2004** |   |
|                                                                                                                                                                  |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| FASHION                BUG®                                                                                                                                 |   | $                                       | 240.9  |                                       | $      | 236.7 |   | $ | 790.6 |   | $ | 787.9 |   |
| LANE                BRYANT®                                                                                                                                 |   |                                    | 247.1  |                                       |   | 229.9 |   |   | 757.2 |   |   | 715.6 |   |
| CATHERINES®                                                                                                                                                 |   |                                    | 80.9   |                                       |   | 74.3 |   |   | 263.1 |   |   | 241.4 |   |
| Total                Retail Stores segment sales                                                                                                                 |   |                                    | 568.9  |                                       |   | 540.9 |   |   | 1,810.9 |   |   | 1,744.9 |   |
| Total                direct-to-consumer segment sales(1)                                                                                                         |   |                                    | 93.6   |                                       |   | 0.0 |   |   | 143.0 |   |   | 0.0 |   |
| Corporate                and other(2)                                                                                                                            |   |                                    | 0.8    |                                       |   | 0.9 |   |   | 1.0 |   |   | 1.3 |   |
| Total                net sales                                                                                                                                   |   | $                                       | 663.3  |                                       | $      | 541.8 |   | $ | 1,954.9 |   | $ | 1,746.2 |   |
| ____________________                                                                                                                                                  |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| *(1)* *Includes                the results of operations of Crosstown Traders, Inc. from the date                of                acquisition on June 2, 2005.* |
| *(2)* *Revenue                related to loyalty card                fees.*                                                                                      |

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**Table          of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Thirteen                Weeks Ended** |   | **Thirty-nine                Weeks Ended** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **October                29,**          |   | **October                30,**             |   | **October                29,** |   | **October                30,** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **2005**                                |   | **2004**                                   |   | **2005** |   | **2004** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| **Retail                Stores segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Increase                (decrease) in comparable store sales(1)                :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Consolidated                retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                    | 3      | %                                          |   | 1 | % |   | 2 | % |   | 2 | % |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 1      |                                       |   | (3 | ) |   | 0 |   |   | 2 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 9      |                                       |   | (5 | ) |   | 8 |   |   | (5 | ) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 4      |                                       |   | 7 |   |   | 2 |   |   | 5 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Sales                from new stores and E-commerce as a percentage of total consolidated                prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 2      |                                       |   | 1 |   |   | 1 |   |   | 1 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 1      |                                       |   | 1 |   |   | 1 |   |   | 1 |   |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 4      |                                       |   | 3 |   |   | 4 |   |   | 3 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Prior-period                sales from closed stores as a percentage of total consolidated                prior-period sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | (1     | )                                          |   | (2 | ) |   | (1 | ) |   | (2 | ) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | (1     | )                                          |   | (0 | ) |   | (1 | ) |   | (0 | ) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | (1     | )                                          |   | (1 | ) |   | (1 | ) |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Increase                in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                    | 5      |                                       |   | 2 |   |   | 4 |   |   | 3 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| **Direct-to-Consumer                segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Sales                as a percentage of total consolidated prior-period sales(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                    | 17     |                                       |   | - |   |   | 8 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| Increase                in total net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                    | 22     |                                       |   | 2 |   |   | 12 |   |   | 3 |   |
| *____________________*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                    |   |                                       |   |   |   |   |   |   |   |   |   |
| *(1)* *“Comparable                store sales” is not a measure that has been defined under generally                accepted accounting principles. The method of calculating comparable                store                sales varies across the retail industry and, therefore, our calculation                of                comparable store sales is not necessarily comparable to similarly-titled                measures reported by other companies. We define comparable store                sales as                sales from stores operating in both the current and prior-year periods.                New stores are added to the comparable store sales base 13 months                after                their open date. Sales from stores that are relocated within the                same mall                or strip-center, remodeled, or have a legal square footage change                of less                than 20% are included in the calculation of comparable store sales.                Sales                from stores that are relocated outside the existing mall or strip-center,                or have a legal square footage change of 20% or more, are excluded                from                the calculation of comparable store sales until 13 months after the                relocated store is opened. Stores that are temporarily closed for                a period                of 4 weeks or more are excluded from the calculation of comparable                store                sales for the applicable periods in the year of closure and the subsequent                year. Non-store sales, such as catalog and internet sales, are excluded                from the calculation of comparable store sales.* |
| *(2)* *Includes                catalog sales and catalog-related E-commerce sales from Crosstown                Traders,                Inc. from the date of acquisition on June 2,                2005.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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**Table          of Contents**

|                                                                                                            |   | **FASHION** |   | **LANE**   |   |           |   |      |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------|--------|------------|--------|----------------|--------|-----------|--------|
|                                                                                                            |   | **BUG**     |   | **BRYANT** |   | **CATHERINES** |   | **Total** |   |
|                                                                                                            |   |        |   |       |   |           |   |      |   |   |   |   |   |
| **Fiscal                2006 Year-to-Date****(1)****:**                                                         |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                at January 29, 2005                                                                       |   |        | 1,028  |       |   | 722            |   |      | 471    |   |   | 2,221 |   |
|                                                                                                            |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                opened                                                                                    |   |        | 12     |       |   | 29             |   |      | 6      |   |   | 47 |   |
| Stores                closed                                                                                    |   |        | (6     | )          |   | (6             | )      |      | (10    | ) |   | (22 | ) |
| Net                change in stores                                                                             |   |        | 6      |       |   | 23             |   |      | (4     | ) |   | 25 |   |
|                                                                                                            |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                at October 29, 2005                                                                       |   |        | 1,034  |       |   | 745            |   |      | 467    |   |   | 2,246 |   |
|                                                                                                            |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Stores                relocated during period                                                                   |   |        | 17     |       |   | 25             |   |      | 13     |   |   | 55 |   |
|                                                                                                            |   |        |   |       |   |           |   |      |   |   |   |   |   |
| **Fiscal                2006:**                                                                                 |   |        |   |       |   |           |   |      |   |   |   |   |   |
| Planned                store openings                                                                           |   |        | 19     |       |   | 45             |   |      | 6      |   |   | 70 |   |
| Planned                store closings                                                                           |   |        | 22     |       |   | 20             |   |      | 14     |   |   | 56 |   |
| Planned                store relocations                                                                        |   |        | 20     |       |   | 30             |   |      | 16     |   |   | 66 |   |
| *____________________*                                                                                          |   |        |   |       |   |           |   |      |   |   |   |   |   |
| *(1)* *Does                not include 3 outlet stores operated by Crosstown Traders,                Inc.* |

**Comparison      of Thirteen Weeks Ended October 29, 2005 and October 30,      2004**

***Net      Sales***

**“RECENT      DEVELOPMENTS”**

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**Table          of Contents**

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

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**Table          of Contents**

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

**“RECENT      DEVELOPMENTS: **
***VISA/MasterCard      Antitrust Litigation”***

***Other      Income***

***Income      Tax Provision***

**“Item      1. Notes To Condensed Consolidated Financial Statements (Unaudited); Note 9.      Income Taxes”**

**Comparison      of Thirty-nine Weeks Ended October 29, 2005 and October 30,      2004**

***Net      Sales***

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**Table          of Contents**

**“RECENT      DEVELOPMENTS”**

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

----

**Table          of Contents**

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

**“RECENT      DEVELOP-MENTS: **
***VISA/MasterCard      Antitrust Litigation”***

***Other      Income***

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**Table          of Contents**

***Income      Tax Provision***

**“Item      1. Notes To Condensed Consolidated Financial Statements (Unaudited); Note 9.      Income Taxes”**

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

|                                                |   | **October                29,** |   | **January                29,** |   |
|-----------------------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|
| ***(Dollars                in millions)***          |   | **2005**                       |   | **2005**                       |   |
|                                                |   |                           |   |                           |   |   |   |
| Cash                and cash equivalents       |   | $                              | 151.7  |                           | $      | 273.0 |   |
| Working                capital                 |   | $                              | 390.2  |                           | $      | 414.0 |   |
| Current                ratio                   |   |                           | 1.8    |                           |   | 2.4 |   |
| Long-term                debt to equity ratio  |   |                           | 31.1   | %                              |   | 30.0 | % |

***Acquisition***

**“RECENT      DEVELOPMENTS”**

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**Table          of Contents**

**"FINANCING;      **
***Revolving      Credit Facility***
**"**

***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 October 29, 2005                                                                                                                                                                                                                                                                                                                                                                                                       | $19.5                              |   | $100.0                             |   | $                   0.0       |   | $180.0                             |   | $50.0                              |
| First                  scheduled principal payment                                                                                                                                                                                                                                                                                                                                                                                                    | Not                  applicable    |   | August                  2007       |   | Not                  applicable    |   | April                  2009        |   | Not                  applicable    |
| Expected                  final principal payment                                                                                                                                                                                                                                                                                                                                                                                                     | Not                  applicable(2) |   | May                  2008          |   | Not                  applicable(2) |   | March                  2010        |   | Not                  applicable(2) |
| Renewal                                                                                                                                                                                                                                                                                                                                                                                                                                               | Annual                             |   | Not                  applicable    |   | Annual                             |   | Not                  applicable    |   | Annual                             |
| *____________________*                                                                                                                                                                                                                                                                                                                                                                                                                                |                               |   |                               |   |                               |   |                               |   |
| *(1)* *Receivables                  Purchase Agreement*                                                                                                                                                                                                                                                                                                                                                                                          |
| *(2)* *Series                  1999-2 and Series 2004 have scheduled final payment dates that                  occur in                  the twelfth month following the month in which the series begins                  amortizing. These series and 2005-RPA generally begin amortizing                  364 days                  after the start of the purchase commitment by the series purchaser                  currently in effect.* |

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**Table          of Contents**

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**Table          of Contents**

**“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 16. Asset Securitization”**

**“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 16. Asset Securitization”**

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; Note 17. Leases”**

**FINANCING**

***Revolving      Credit Facility***

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**Table          of Contents**

**“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 7. Debt”**

**MARKET      RISK**** **

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**Table          of Contents**

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

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

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

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

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

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**Table          of Contents**

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

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

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           |                      |                            |   | **Total**                             |   | **Maximum**                      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------------------------|---------------------------------|--------|---------------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           |                      |                            |   | **Number**                            |   | **Number                  of**   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           |                      |                            |   | **of                  Shares**        |   | **Shares                  that** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           |                      |                            |   | **Purchased                  as**     |   | **May                  Yet be**  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Total**                      |                      |                            |   | **Part                  of Publicly** |   | **Purchased**                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Number**                     |                      | **Average**                     |   | **Announced**                         |   | **Under                  the**   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **of                  Shares** |                      | **Price                  Paid** |   | **Plans                  or**         |   | **Plans                  or**    |   |
| **Period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | **Purchased**                  |                      | **per                  Share**  |   | **Programs**(2)                       |   | **Programs**(2)                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           |                      |                            |   |                                  |   |                             |   |   |   |   |   |
| July                  31, 2005 through August 27, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 1,422(1)                  |                            | $      | 11.31                                 |   |                             | -      |   |   | - |   |
| August                  28, 2005 through October 1, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 58(1)                     |                            |   | 10.89                                 |   |                             | -      |   |   | - |   |
| October                  2, 2005 through October 29, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | -                    |                            |   | -                                     |   |                             | -      |   |   | - |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                           | 1,480           |                            | $      | 11.29                                 |   |                             | -      |   |   | - |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *(1)* *Shares                  withheld for the payment of payroll taxes on employee stock awards                  that                  vested during the period.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *(2)**In                  Fiscal 1998, we publicly announced that                  our Board of Directors granted authority to repurchase up to 10,000,000                  shares of our common stock. In Fiscal 2000, we publicly announced                  that our                  Board of Directors granted authority to repurchase up to an additional                  10,000,000 shares of our common stock. In Fiscal 2003, the Board                  of                  Directors granted an additional authorization to repurchase 6,350,662                  shares of common stock issued to Limited Brands in connection with                  our                  acquisition of LANE BRYANT. From Fiscal 1998 through Fiscal 2003,                  we                  repurchased a total of 21,370,993 shares of common stock, which                  included                  shares purchased on the open market as well as shares repurchased                  from                  Limited Brands. As of July 30, 2005, 4,979,669 shares of our common                  stock                  remain available for repurchase under these programs. Our revolving                  credit                  facility allows the repurchase of our common stock subject to maintaining                  a minimum level of Excess Availability (as defined in the facility                  agreement) immediately before and after such repurchase. As conditions                  may                  allow, we may from time to time acquire additional shares of our                  common                  stock under these programs. Such shares, if purchased, would be                  held as                  treasury shares. No shares were acquired under these programs during                  the                  thirteen weeks ended October 29, 2005. The repurchase programs                  have no                  expiration date.* |

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**Table          of Contents**

**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).                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1  | The                Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan,                incorporated by reference to Appendix B of the Registrant’s Proxy                Statement Pursuant to Section 14 of the Securities Exchange Act of                1934,                filed on May 22, 2003.                                                                                                                                                                                                                                                                               |
| 10.2  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Stock Option Agreement, incorporated by reference to Form 8-K of                the                Registrant dated June 23, 2005, filed on June 29, 2005. (Exhibit                10.1).                                                                                                                                                                                                                                                                                        |
| 10.3  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Restricted Share Units Agreement, incorporated by reference to Form                8-K of                the Registrant dated June 23, 2005, filed on June 29, 2005. (Exhibit                10.2).                                                                                                                                                                                                                                                                              |
| 10.4  | Charming                Shoppes, Inc. Performance Share Agreement dated as of June 2, 2005,                between Charming Shoppes, Inc. and Steven A. Lightman, incorporated                by                reference to Form 10-Q of the Registrant for the quarter ended July                30,                2005 (File No. 000-07258, Exhibit 10.4).                                                                                                                                                                                                                                             |
| 10.5  | Charming                Shoppes, Inc. Restricted Stock Agreement dated as of June 2, 2005,                between                Charming Shoppes, Inc. and Steven A Lightman, incorporated by reference                to                Form 10-Q of the Registrant for the quarter ended July 30, 2005 (File                No.                000-07258, Exhibit 10.5).                                                                                                                                                                                                                                |
| 10.6  | Form                of Charming Shoppes, Inc. Restricted Stock Agreement dated as of                June 2,                2005, between Charming Shoppes, Inc. and certain employees of Crosstown                Traders, Inc., incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 30, 2005 (File No. 000-07258, Exhibit                10.6).                                                                                                                                                                                                            |
| 10.7  | Purchase                Agreement dated as of March 14, 2005 between Citibank USA, N.A.,                Spirit of                America National Bank, and Catherines, Inc., incorporated by reference                to                Form 8-K of the Registrant dated March 18, 2005, filed on March 22,                2005.                (Exhibit 99).                                                                                                                                                                                                                                             |
| 10.8  | Amended                and Restated Receivables Purchase Agreement dated as of June 2, 2005                among                Catalog Receivables LLC as Seller, Spirit of America, Inc. as Servicer,                Sheffield Receivables Corporation as Purchaser, and Barclay’s Bank PLC as                Administrator, incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 30, 2005 (File No. 000-07258, Exhibit                10.8).                                                                                                        |
| 10.9  | Letter                Agreement dated as of May 18, 2005 amending the Certificate Purchase                Agreement dated as of January 21, 2004 among Charming Shoppes Receivables                Corp. as Seller and Class B Purchaser, Spirit of America, Inc. as                Servicer, Sheffield Receivables Corporation as Conduit Purchaser,                and                Barclays Bank PLC as Administrator, incorporated by reference to                Form 10-Q                of the Registrant for the quarter ended July 30, 2005 (File No. 000-07258,                Exhibit 10.9).  |

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**Table          of Contents**

| 10.10  | Amendment                and Joinder Agreement, dated as of June 2, 2005, by Crosstown Traders,                Inc. and Other Crosstown Companies in favor of Wachovia Bank National                Association as Agent for Lenders and financial institutions from                time to                time parties to the Amended and Restated Loan and Security Agreement,                dated January 29, 2004, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 30, 2005 (File No. 000-07258,                Exhibit 10.10).                                                                                                                                                                                                                                       |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11  | Second                Amended and Restated Loan and Security Agreement, dated July 28,                2005, by                and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc.,                CSI                Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation,                Lane                Bryant, Inc., and Crosstown Traders, Inc. as borrowers; a syndicate                of                banks and other financial institutions as lenders, including Wachovia                Bank, National Association as agent for the lenders; and certain                of the                Company’s subsidiaries as guarantors, incorporated by reference to Form                8-K of the Registrant dated July 28, 2005, filed on August 3, 2005.                (Exhibit 10.1).  |
| 31.1   | Certification                by Principal Executive Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2   | Certification                by Principal Financial Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32     | Certification                Pursuant to 18 U.S.C. Section 1350, as                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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**Table          of Contents**

**SIGNATURES**

|                                       | **CHARMING                SHOPPES, INC.**            |
|--------------------------------------------|------------------------------------------------------|
|                                       | (Registrant)                                         |
|                                       |                                                 |
|                                       |                                                 |
|                                       |                                                 |
| Date: December                5, 2005 | **/S/                DORRIT J. BERN**                |
|                                       | Dorrit                J. Bern                        |
|                                       | Chairman                of the Board                 |
|                                       | President                and Chief Executive Officer |
|                                       |                                                 |
|                                       |                                                 |
|                                       |                                                 |
| Date: December                5, 2005 | **/S/                ERIC M. SPECTER**               |
|                                       | Eric                M. Specter                       |
|                                       | Executive                Vice President              |
|                                       | Chief                Financial Officer               |

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**Table          of Contents**

**Exhibit      Index**

| **Exhibit                No.**  | **Item**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                             | Stock                Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition                Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown                Traders, Inc. whose names are set forth on the signature pages thereto                and                J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,                incorporated by reference to Form 8-K of the Registrant dated June                2,                2005, filed on June 8, 2005. (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).                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1                            | The                Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan,                incorporated by reference to Appendix B of the Registrant’s Proxy                Statement Pursuant to Section 14 of the Securities Exchange Act of                1934,                filed on May 22, 2003.                                                                                                                                                                                                                                                                               |
| 10.2                            | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Stock Option Agreement, incorporated by reference to Form 8-K of                the                Registrant dated June 23, 2005, filed on June 29, 2005. (Exhibit                10.1).                                                                                                                                                                                                                                                                                        |
| 10.3                            | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Restricted Share Units Agreement, incorporated by reference to Form                8-K of                the Registrant dated June 23, 2005, filed on June 29, 2005. (Exhibit                10.2).                                                                                                                                                                                                                                                                              |
| 10.4                            | Charming                Shoppes, Inc. Performance Share Agreement dated as of June 2, 2005,                between Charming Shoppes, Inc. and Steven A. Lightman, incorporated                by                reference to Form 10-Q of the Registrant for the quarter ended July                30,                2005 (File No. 000-07258, Exhibit 10.4).                                                                                                                                                                                                                                             |
| 10.5                            | Charming                Shoppes, Inc. Restricted Stock Agreement dated as of June 2, 2005,                between                Charming Shoppes, Inc. and Steven A Lightman, incorporated by reference                to                Form 10-Q of the Registrant for the quarter ended July 30, 2005 (File                No.                000-07258, Exhibit 10.5).                                                                                                                                                                                                                                |
| 10.6                            | Form                of Charming Shoppes, Inc. Restricted Stock Agreement dated as of                June 2,                2005, between Charming Shoppes, Inc. and certain employees of Crosstown                Traders, Inc., incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 30, 2005 (File No. 000-07258, Exhibit                10.6).                                                                                                                                                                                                            |
| 10.7                            | Purchase                Agreement dated as of March 14, 2005 between Citibank USA, N.A.,                Spirit of                America National Bank, and Catherines, Inc., incorporated by reference                to                Form 8-K of the Registrant dated March 18, 2005, filed on March 22,                2005.                (Exhibit 99).                                                                                                                                                                                                                                             |
| 10.8                            | Amended                and Restated Receivables Purchase Agreement dated as of June 2, 2005                among                Catalog Receivables LLC as Seller, Spirit of America, Inc. as Servicer,                Sheffield Receivables Corporation as Purchaser, and Barclay’s Bank PLC as                Administrator, incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 30, 2005 (File No. 000-07258, Exhibit                10.8).                                                                                                        |
| 10.9                            | Letter                Agreement dated as of May 18, 2005 amending the Certificate Purchase                Agreement dated as of January 21, 2004 among Charming Shoppes Receivables                Corp. as Seller and Class B Purchaser, Spirit of America, Inc. as                Servicer, Sheffield Receivables Corporation as Conduit Purchaser,                and                Barclays Bank PLC as Administrator, incorporated by reference to                Form 10-Q                of the Registrant for the quarter ended July 30, 2005 (File No. 000-07258,                Exhibit 10.9).  |

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**Table          of Contents**

| 10.10  | Amendment                and Joinder Agreement, dated as of June 2, 2005, by Crosstown Traders,                Inc. and Other Crosstown Companies in favor of Wachovia Bank National                Association as Agent for Lenders and financial institutions from                time to                time parties to the Amended and Restated Loan and Security Agreement,                dated January 29, 2004, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 30, 2005 (File No. 000-07258,                Exhibit 10.10).                                                                                                                                                                                                                                       |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11  | Second                Amended and Restated Loan and Security Agreement, dated July 28,                2005, by                and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc.,                CSI                Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation,                Lane                Bryant, Inc., and Crosstown Traders, Inc. as borrowers; a syndicate                of                banks and other financial institutions as lenders, including Wachovia                Bank, National Association as agent for the lenders; and certain                of the                Company’s subsidiaries as guarantors, incorporated by reference to Form                8-K of the Registrant dated July 28, 2005, filed on August 3, 2005.                (Exhibit 10.1).  |
| 31.1   | Certification                By Principal Executive Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2   | Certification                By Principal Financial Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32     | Certification                Pursuant to 18 U.S.C. Section 1350, as                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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