----

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| Delaware(State      or other jurisdiction of incorporation or organization) 1706      Washington Ave., St. Louis, Missouri(Address      of principal executive offices) | 43-1256674(I.R.S.      Employer Identification No.) 63103(Zip      Code) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|

| Registrant’s      telephone number, including area code:  314/231-1575 |
|------------------------------------------------------------------------------|

| Securities      registered pursuant to Section 12(b) of the Act:  |
|------------------------------------------------------------------------|
| Title      of each classCommon      Stock, par value $0.40 per share   | Name      of each exchange on which registeredNew      York Stock Exchange |

| Securities      registered pursuant to Section 12(g) of the Act: None  |
|-----------------------------------------------------------------------------|

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| PART      I.  |   | FINANCIAL      INFORMATION |   | Page                                                                                            |
|---------------|--------|----------------------------|--------|-------------------------------------------------------------------------------------------------|
|          |   |                       |   |                                                                                            |
|          |   | Item 1.                    |   | Financial      Statements:                                                                      |   |   |
|          |   |                       |   |                                                                                            |   |   |
|          |   |                       |   | Interim      Consolidated Balance Sheets                                                        |   |   |
|          |   |                       |   | November      14, 2009 (Unaudited) and February 7, 2009                                         |   | 1 |
|          |   |                       |   |                                                                                            |   |   |
|          |   |                       |   | Interim      Consolidated Statements of Operations (Unaudited)                                  |   |   |
|          |   |                       |   | 16      and 40 weeks Ended November 14, 2009 and November 8, 2008                               |   | 3 |
|          |   |                       |   |                                                                                            |   |   |
|          |   |                       |   | Interim      Consolidated Statement of Changes in Stockholders'                                 |   |   |
|          |   |                       |   | Equity      (Unaudited) 40 weeks Ended November 14, 2009                                        |   | 4 |
|          |   |                       |   |                                                                                            |   |   |
|          |   |                       |   | Interim      Consolidated Statements of Cash Flow (Unaudited)                                   |   |   |
|          |   |                       |   | 40      weeks Ended November 14, 2009 and November 8, 2008                                      |   | 5 |
|          |   |                       |   |                                                                                            |   |   |
|          |   |                       |   | Notes      to Interim Consolidated Financial Statements (Unaudited)                             |   | 7 |
|          |   |                       |   |                                                                                            |   |   |
|          |   | Item 2.                    |   | Management's      Discussion and Analysis of Financial Condition and Results of      Operations |   |            18 |
|          |   |                       |   |                                                                                            |   |   |
|          |   | Item 3.                    |   | Quantitative      and Qualitative Disclosures about Market Risk                                 |   | 27 |
|          |   |                       |   |                                                                                            |   |   |
|          |   | Item 4.                    |   | Controls      and Procedures                                                                    |   | 27 |
|          |   |                       |   |                                                                                            |   |   |
| PART      II. |   | OTHER      INFORMATION     |   |                                                                                            |
|          |   |                       |   |                                                                                            |   |   |
|          |   | Item 6.                    |   | Exhibits                                                                                        |   | 28 |
|          |   |                       |
| SIGNATURES    |   |                       |   | 29                                                                                              |
|          |   |                       |
| EXHIBIT INDEX |   |                       |   | 30                                                                                              |
|          |   |                       |   |                                                                                            |   |   |   |   |   |   |   |

| PART      I. |   | FINANCIAL      INFORMATION |
|--------------|--------|----------------------------|

| Item 1. |   | Financial      Statements |
|---------|--------|---------------------------|

| in      thousands                                                                       |   | November      14, 2009 |    |   | February      7, 2009 |   |
|-----------------------------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|
|                                                                                    |   | (Unaudited)            |    |   |                  |   |
| ASSETS                                                                                  |   |                   |    |   |                  |   |
| Current      assets:                                                                    |   |                   |    |   |                  |   |
|           Cash and cash equivalents                                 |   | $                      | 8,286   |   |                  | $      | 23,665 |   |
|           Accounts receivable:                                      |   |                   |    |   |                  |   |   |   |
|                Trade                       |   |                   | 10,711  |   |                  |   | 6,050 |   |
|                Other                       |   |                   | 926     |   |                  |   | 923 |   |
|           Inventories                                               |   |                   | 9,804   |   |                  |   | 8,489 |   |
|           Prepaid expenses and other current assets                 |   |                   | 12,436  |   |                  |   | 5,800 |   |
|           Refundable income taxes                                   |   |                   | 457     |   |                  |   | 357 |   |
|           Deferred tax assets                                       |   |                   | 14,259  |   |                  |   | 9,581 |   |
|           Assets held for sale                                      |   |                   | 6,577   |   |                  |   | 6,615 |   |
|                                                                                    |   |                   |    |   |                  |   |   |   |
|           Total current assets                                      |   |                   | 63,456  |   |                  |   | 61,480 |   |
|                                                                                    |   |                   |    |   |                  |   |   |   |
| Property      and equipment:                                                            |   |                   |    |   |                  |   |   |   |
|           Land                                                      |   |                   | 2,185   |   |                  |   | 3,249 |   |
|           Buildings and building improvements                       |   |                   | 25,184  |   |                  |   | 32,377 |   |
|           Leasehold improvements                                    |   |                   | 4,460   |   |                  |   | 4,406 |   |
|           Photographic, sales and manufacturing equipment           |   |                   | 168,780 |   |                  |   | 178,732 |   |
|                Total                       |   |                   | 200,609 |   |                  |   | 218,764 |   |
|           Less accumulated depreciation and amortization            |   |                   | 162,850 |   |                  |   | 167,877 |   |
|                Property and equipment, net |   |                   | 37,759  |   |                  |   | 50,887 |   |
| Prepaid      debt fees                                                                  |   |                   | 2,462   |   |                  |   | 2,262 |   |
| Goodwill                                                                                |   |                   | 21,759  |   |                  |   | 21,459 |   |
| Intangible      assets, net                                                             |   |                   | 39,349  |   |                  |   | 40,206 |   |
| Deferred      tax assets                                                                |   |                   | 8,796   |   |                  |   | 8,359 |   |
| Other      assets                                                                       |   |                   | 7,715   |   |                  |   | 8,202 |   |
|                                                                                    |   |                   |    |   |                  |   |   |   |
|                TOTAL ASSETS                |   | $                      | 181,296 |   |                  | $      | 192,855 |   |
|                                                                                    |   |                   |    |   |                  |   |   |   |

| in      thousands, except share and per share data                                                            |   | November      14, 2009 |    |   | February      7, 2009 |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|
|                                                                                                          |   | (Unaudited)            |    |   |                  |   |
| LIABILITIES                                                                                                   |   |                   |    |   |                  |   |
| Current      liabilities:                                                                                     |   |                   |    |   |                  |   |
|           Current maturities of long-term debt                                            |   | $                      | 22,000  |   |                  | $      | 1,150 |   |
|           Accounts payable                                                                |   |                   | 6,685   |   |                  |   | 6,816 |   |
|           Accrued employment costs                                                        |   |                   | 13,295  |   |                  |   | 10,146 |   |
|           Customer deposit liability                                                      |   |                   | 19,599  |   |                  |   | 12,503 |   |
|           Sales taxes payable                                                             |   |                   | 4,355   |   |                  |   | 5,284 |   |
|           Accrued advertising expenses                                                    |   |                   | 7,479   |   |                  |   | 978 |   |
|           Accrued expenses and other liabilities                                          |   |                   | 13,024  |   |                  |   | 18,133 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
|           Total current liabilities                                                       |   |                   | 86,437  |   |                  |   | 55,010 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
| Long-term      debt, less current maturities                                                                  |   |                   | 75,458  |   |                  |   | 104,578 |   |
| Accrued      pension plan obligations                                                                         |   |                   | 9,502   |   |                  |   | 10,591 |   |
| Other      liabilities                                                                                        |   |                   | 16,492  |   |                  |   | 21,841 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
|           Total liabilities                                                               |   |                   | 187,889 |   |                  |   | 192,020 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
| CONTINGENCIES      (see Note 13)                                                                              |   |                   |    |   |                  |   |   |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
| STOCKHOLDERS'      EQUITY                                                                                     |   |                   |    |   |                  |   |   |   |
| Preferred      stock, no par value, 1,000,000 shares authorized; no shares      outstanding                   |   |                   | -       |   |                  |   | - |   |
| Preferred      stock, Series A, no par value, 200,000 shares authorized; no      shares                       |   |                   |    |   |                  |   |   |   |
|           outstanding                                                                     |   |                   | -       |   |                  |   | - |   |
| Common      stock, $0.40 par value, 50,000,000 shares authorized; 9,180,135 and      17,089,788               |   |                   |    |   |                  |   |   |   |
|           shares outstanding at November 14, 2009 and February 7, 2009,      respectively |   |                   | 3,672   |   |                  |   | 6,836 |   |
| Additional      paid-in capital                                                                               |   |                   | 28,639  |   |                  |   | 55,413 |   |
| Retained      earnings                                                                                        |   |                   | 20,939  |   |                  |   | 183,704 |   |
| Accumulated      other comprehensive loss                                                                     |   |                   | (10,711 | )      |                  |   | (13,114 | ) |
|                                                                                                          |   |                   | 42,539  |   |                  |   | 232,839 |   |
| Treasury      stock - at cost, 2,175,591 and 10,270,319 shares at November 14, 2009      and                  |   |                   |    |   |                  |   |   |   |
|           February 7, 2009, respectively                                                  |   |                   | (49,132 | )      |                  |   | (232,004 | ) |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
|           Total stockholders' equity                                                      |   |                   | (6,593  | )      |                  |   | 835 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |
|           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      |   | $                      | 181,296 |   |                  | $      | 192,855 |   |
|                                                                                                          |   |                   |    |   |                  |   |   |   |

| in      thousands, except share and per share data                                                        |   | 16      Weeks Ended    |      |   | 40      Weeks Ended   |   |
|-----------------------------------------------------------------------------------------------------------|--------|------------------------|-----------|--------|-----------------------|--------|
|                                                                                                      |   | November      14, 2009 |      |   | November      8, 2008 |   |   | November      14, 2009 |   |   | November      8, 2008 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |
| Net      sales                                                                                            |   | $                      | 107,286   |   |                  | $      | 115,689 |   |   | $ | 282,130 |   |   | $ | 308,619 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Cost      and expenses:                                                                                   |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           Cost of sales (exclusive of depreciation and amortization shown      below) |   |                   | 8,032     |   |                  |   | 11,288 |   |   |   | 21,643 |   |   |   | 31,412 |   |
|           Selling, general and administrative expenses                                |   |                   | 99,940    |   |                  |   | 109,552 |   |   |   | 245,480 |   |   |   | 269,761 |   |
|           Depreciation and amortization                                               |   |                   | 6,320     |   |                  |   | 8,616 |   |   |   | 17,913 |   |   |   | 21,673 |   |
|           Other charges and impairments                                               |   |                   | 1,144     |   |                  |   | 2,092 |   |   |   | 3,751 |   |   |   | 4,946 |   |
|                                                                                                      |   |                   | 115,436   |   |                  |   | 131,548 |   |   |   | 288,787 |   |   |   | 327,792 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from operations                                                                                 |   |                   | (8,150    | )      |                  |   | (15,859 | ) |   |   | (6,657 | ) |   |   | (19,173 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                     |   |                   | 2,542     |   |                  |   | 3,866 |   |   |   | 5,961 |   |   |   | 6,753 |   |
| Interest      income                                                                                      |   |                   | 130       |   |                  |   | 87 |   |   |   | 370 |   |   |   | 567 |   |
| Other      income, net                                                                                    |   |                   | 236       |   |                  |   | 56 |   |   |   | 253 |   |   |   | 59 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      before income tax benefit                                                                       |   |                   | (10,326   | )      |                  |   | (19,582 | ) |   |   | (11,995 | ) |   |   | (25,300 | ) |
| Income      tax benefit                                                                                   |   |                   | (3,524    | )      |                  |   | (6,507 | ) |   |   | (4,094 | ) |   |   | (8,727 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss from continuing operations                                                                  |   |                   | (6,802    | )      |                  |   | (13,075 | ) |   |   | (7,901 | ) |   |   | (16,573 | ) |
| Net      loss from discontinued operations                                                                |   |                   | -         |   |                  |   | (266 | ) |   |   | - |   |   |   | (625 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS                                                                                             |   | $                      | (6,802    | )      |                  | $      | (13,341 | ) |   | $ | (7,901 | ) |   | $ | (17,198 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS PER COMMON SHARE                                                                            |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss per share from continuing operations - diluted                                              |   | $                      | (0.97     | )      |                  | $      | (2.02 | ) |   | $ | (1.13 | ) |   | $ | (2.56 | ) |
| Net      loss per share from discontinued operations - diluted                                            |   |                   | -         |   |                  |   | (0.04 | ) |   |   | - |   |   |   | (0.10 | ) |
| Net      loss per share - diluted                                                                         |   | $                      | (0.97     | )      |                  | $      | (2.06 | ) |   | $ | (1.13 | ) |   | $ | (2.66 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss per share from continuing operations - basic                                                |   | $                      | (0.97     | )      |                  | $      | (2.02 | ) |   | $ | (1.13 | ) |   | $ | (2.56 | ) |
| Net      loss per share from discontinued operations - basic                                              |   |                   | -         |   |                  |   | (0.04 | ) |   |   | - |   |   |   | (0.10 | ) |
| Net      loss per share - basic                                                                           |   | $                      | (0.97     | )      |                  | $      | (2.06 | ) |   | $ | (1.13 | ) |   | $ | (2.66 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of common and common equivalent                                              |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           shares outstanding - diluted                                                |   |                   | 7,003,832 |   |                  |   | 6,479,496 |   |   |   | 6,987,746 |   |   |   | 6,467,352 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of common and common equivalent                                              |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           shares outstanding - basic                                                  |   |                   | 7,003,832 |   |                  |   | 6,479,496 |   |   |   | 6,987,746 |   |   |   | 6,467,352 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands, except share and per share data                    |   |   |   |   |       |   |    |     |   |   | Accumulated   |   |   |         |    |   |   |   |
|-----------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|---------|----------|--------|--------|---------------|--------|--------|--------------|---------|--------|--------|--------|
|                                                                  |   |   |   |   | Additional |   |    |     |   |   | other         |   |   | Treasury     |    |   |   |   |
|                                                                  |   | Common |   |   | paid-in    |   |    | Retained |   |   | comprehensive |   |   | stock,       |    |   |   |   |
|                                                                  |   | stock  |   |   | capital    |   |    | earnings |   |   | loss          |   |   | at      cost |    |   | Total  |   |
|                                                                  |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |
| Balance      at February 7, 2009                                      |   | $      | 6,836  |   |       | $      | 55,413  |     |   | $      | 183,704       |   |   | $            | (13,114 | )      |   | $      | (232,004 | ) |   | $ | 835 |   |
|                                                                  |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Net      loss                                                         |   |   | -      |   |       |   | -       |     |   |   | (7,901        | )      |   |         | -       |   |   |   | - |   |   |   | (7,901 | ) |
| Total      other comprehensive income (consisting primarily of        |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |
| foreign      exchange impact)                                         |   |   | -      |   |       |   | -       |     |   |   | -             |   |   |         | 2,403   |   |   |   | - |   |   |   | 2,403 |   |
|                                                                  |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total      comprehensive loss                                         |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   | (5,498 | ) |
| Surrender      of employee shares for taxes                           |   |   | -      |   |       |   | -       |     |   |   | -             |   |   |         | -       |   |   |   | (30 | ) |   |   | (30 | ) |
| Retirement      of treasury stock (8,000,000 shares, at average cost) |   |   | (3,200 | )      |       |   | (25,939 | )        |   |   | (151,527      | )      |   |         | -       |   |   |   | 180,666 |   |   |   | - |   |
| Issuance      of common stock and restricted stock awards, net of     |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |
| forfeitures      (90,347 shares)                                      |   |   | 36     |   |       |   | (1,653  | )        |   |   | -             |   |   |         | -       |   |   |   | 2,236 |   |   |   | 619 |   |
| Stock-based      compensation recognized                              |   |   | -      |   |       |   | 818     |     |   |   | -             |   |   |         | -       |   |   |   | - |   |   |   | 818 |   |
| Dividends      ($0.48 per common share)                               |   |   | -      |   |       |   | -       |     |   |   | (3,337        | )      |   |         | -       |   |   |   | - |   |   |   | (3,337 | ) |
|                                                                  |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Balance      at November 14, 2009                                     |   | $      | 3,672  |   |       | $      | 28,639  |     |   | $      | 20,939        |   |   | $            | (10,711 | )      |   | $      | (49,132 | ) |   | $ | (6,593 | ) |
|                                                                  |   |   |   |   |       |   |    |     |   |   |          |   |   |         |    |   |   |   |   |   |   |   |   |   |

| in      thousands                                                                                   |   | 40      Weeks Ended    |   |
|-----------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                |   | November      14, 2009 |   |   | November      8, 2008 |   |
| Reconciliation      of net loss to cash flows provided by (used in) operating      activities:      |   |                   |   |   |   |   |
|                                                                                                |   |                   |   |   |   |   |
| Net      loss                                                                                       |   | $                      | (7,901 | ) |   | $ | (17,198 | ) |
|                                                                                                |   |                   |   |   |   |   |   |   |
| Adjustments      for items not requiring (providing) cash:                                          |   |                   |   |   |   |   |   |   |
|           Depreciation and amortization                                         |   |                   | 17,913 |   |   |   | 21,673 |   |
|           Loss from discontinued operations                                     |   |                   | -      |   |   |   | 625 |   |
|           Stock-based compensation expense                                      |   |                   | 818    |   |   |   | 703 |   |
|           Loss on disposition of property and equipment                         |   |                   | 976    |   |   |   | 894 |   |
|           Deferred income tax provision                                         |   |                   | (4,451 | ) |   |   | (9,753 | ) |
|           Pension, supplemental retirement plan and profit sharing      expense |   |                   | 680    |   |   |   | 1,310 |   |
|           Other                                                                 |   |                   | 781    |   |   |   | 515 |   |
|                                                                                                |   |                   |   |   |   |   |   |   |
| Increase      (decrease) in cash flow from operating assets and    liabilities:                     |   |                   |   |   |   |   |   |   |
|           Accounts receivable                                                   |   |                   | (4,527 | ) |   |   | 814 |   |
|           Inventories                                                           |   |                   | (1,097 | ) |   |   | 2,248 |   |
|           Prepaid expenses and other current assets                             |   |                   | (5,912 | ) |   |   | (8,286 | ) |
|           Accounts payable                                                      |   |                   | (163   | ) |   |   | (3,527 | ) |
|           Contribution to pension plan                                          |   |                   | (1,245 | ) |   |   | (2,693 | ) |
|           Accrued expenses and other liabilities                                |   |                   | (1,524 | ) |   |   | 381 |   |
|           Income taxes payable                                                  |   |                   | (98    | ) |   |   | (440 | ) |
|           Deferred revenues and related costs                                   |   |                   | 6,078  |   |   |   | (279 | ) |
|           Other                                                                 |   |                   | (186   | ) |   |   | (106 | ) |
|                                                                                                |   |                   |   |   |   |   |   |   |
| Cash      flows provided by (used in) continuing operations                                         |   |                   | 142    |   |   |   | (13,119 | ) |
|                                                                                                |   |                   |   |   |   |   |   |   |
| Cash      flows used in discontinued operations                                                     |   |                   | -      |   |   |   | (534 | ) |
|                                                                                                |   |                   |   |   |   |   |   |   |
| Cash      flows provided by (used in) operating activities                                          |   |                   | 142    |   |   |   | (13,653 | ) |
|                                                                                                |   |                   |   |   |   |   |   |   |

| in      thousands                                                                                            |   | 40      Weeks Ended    |    |
|--------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                         |   | November      14, 2009 |    |   | November      8, 2008 |   |
|                                                                                                         |   |                   |    |   |   |   |
| Cash      flows provided by (used in) operating activities                                                   |   |                   | 142     |   |   |   | (13,653 | ) |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Cash      flows used in financing activities:                                                                |   |                   |    |   |   |   |   |   |
|           Repayment of long-term debt                                                    |   |                   | (8,270  | ) |   |   | (8,410 | ) |
|           Payment of debt issuance costs                                                 |   |                   | (943    | ) |   |   | - |   |
|           Proceeds from short-term borrowings                                            |   |                   | -       |   |   |   | 5,500 |   |
|           Cash dividends                                                                 |   |                   | (3,337  | ) |   |   | (3,096 | ) |
|           Other                                                                          |   |                   | (13     | ) |   |   | (131 | ) |
|           Cash flows used in financing activities                                        |   |                   | (12,563 | ) |   |   | (6,137 | ) |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Cash      flows (used in) provided by investing activities:                                                  |   |                   |    |   |   |   |   |   |
|           Additions to property and equipment                                            |   |                   | (4,508  | ) |   |   | (31,198 | ) |
|           Proceeds from sale of property and equipment                                   |   |                   | 1,326   |   |   |   | 2 |   |
|           Other                                                                          |   |                   | 130     |   |   |   | 95 |   |
|           Cash flows used in investing activities                                        |   |                   | (3,052  | ) |   |   | (31,101 | ) |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Effect      of exchange rate changes on cash and cash equivalents                                            |   |                   | 94      |   |   |   | (163 | ) |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                                                               |   |                   | (15,379 | ) |   |   | (51,054 | ) |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                                        |   |                   | 23,665  |   |   |   | 59,177 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Cash      and cash equivalents at end of period                                                              |   | $                      | 8,286   |   |   | $ | 8,123 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Supplemental      cash flow information:                                                                     |   |                   |    |   |   |   |   |   |
|           Interest paid                                                                  |   | $                      | 5,487   |   |   | $ | 5,807 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |
|           Income taxes paid, net                                                         |   | $                      | 440     |   |   | $ | 1,019 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |
| Supplemental      non-cash financing activities:                                                             |   |                   |    |   |   |   |   |   |
|           Issuance of treasury stock under the Employee Profit Sharing      Plan         |   | $                      | 594     |   |   | $ | 521 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |
|           Issuance of restricted stock and stock options to employees and      directors |   | $                      | 800     |   |   | $ | 870 |   |
|                                                                                                         |   |                   |    |   |   |   |   |   |

| NOTE      1   - | DESCRIPTION      OF BUSINESS AND INTERIM CONSOLIDATED FINANCIAL STATEMENTS  |
|--------------------------------|----------------------------------------------------------------------------------|

| NOTE      2   - | ADOPTION      OF NEW ACCOUNTING STANDARDS |
|--------------------------------|-------------------------------------------|

| NOTE      3   - | FAIR      VALUE MEASUREMENTS |
|--------------------------------|------------------------------|

| Level      1 - |   | Inputs      were unadjusted, quoted prices in active markets for identical assets or      liabilities at the measurement date.                                                                                                                                                                  |
|----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                                                                                            |
| Level      2 - |   | Inputs      (other than quoted prices included in Level 1) were either directly or      indirectly observable for the asset or liability through correlation with      market data at the measurement date and for the duration of the      instrument’s anticipated life.                |
|           |   |                                                                                                                                                                                                                                                                                            |
| Level      3 - |   | Inputs      reflected management’s best estimate of what market participants would use      in pricing the asset or liability at the measurement date. Consideration      was given to the risk inherent in the valuation technique and the risk      inherent in the inputs to themodel. |

|                        |   | Fair      Value Measurements |   |
|-----------------------------|--------|------------------------------|--------|
|                        |   | Level      1                 |   |   | Level      2 |   |   | Level      3 |   |   | Total |   |
| Liabilities                 |   |                         |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swap (1) |   | $                            | -      |   |   | $ | 2.7 |   |   | $ | - |   |   | $ | 2.7 |   |
|                        |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                   (1) | The      total fair value of the interest rate swap is included in Accrued Expenses      and Other Liabilities as of November 14, 2009.  This financial      instrument was valued using the “income approach” valuation      technique.  This method used valuation techniques to convert      future amounts to a single present amount.  The measurement was      based on the value indicated by current market expectations about those      future amounts.  The Company uses its interest rate swap as a      means of managing interest rates on its outstanding fixed-rate debt      obligations.  Accordingly, the fair market value is estimated to      approximate the recorded value of this instrument.  The fair      value of the interest rate swap at November 14, 2009, and February 7,      2009, was $2.7 million and $3.5 million,  respectively. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE      4   - | DISCONTINUED      OPERATIONS |
|--------------------------------|------------------------------|

| in      thousands                          |   | 16      Weeks Ended   |   |   | 40      Weeks Ended   |   |
|--------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                       |   | November      8, 2008 |   |   | November      8, 2008 |   |
| Discontinued      operations:              |   |                  |   |   |                  |   |
|                                       |   |                  |   |   |                  |   |
| Net      sales                             |   | $                     | 160    |   |                  | $      | 304 |   |
|                                       |   |                  |   |   |                  |   |   |   |
| Operating      loss                        |   | $                     | 426    |   |                  | $      | 998 |   |
| Tax      benefit                           |   |                  | 160    |   |                  |   | 373 |   |
|                                       |   |                  |   |   |                  |   |   |   |
| Net      loss from discontinued operations |   | $                     | 266    |   |                  | $      | 625 |   |
|                                       |   |                  |   |   |                  |   |   |   |

| NOTE      5   - | INVENTORIES  |
|--------------------------------|-------------------|

| in      thousands                              |   | November      14, 2009 |   |   | February      7, 2009 |   |
|------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                           |   |                   |   |   |                  |   |
| Raw      materials - film, paper and chemicals |   | $                      | 2,929  |   |                  | $      | 2,724 |   |
| Portraits      in process                      |   |                   | 2,010  |   |                  |   | 1,313 |   |
| Finished      portraits pending delivery       |   |                   | 147    |   |                  |   | 261 |   |
| Frames      and accessories                    |   |                   | 438    |   |                  |   | 426 |   |
| Studio      supplies                           |   |                   | 3,134  |   |                  |   | 2,495 |   |
| Equipment      repair parts and supplies       |   |                   | 728    |   |                  |   | 878 |   |
| Other                                          |   |                   | 418    |   |                  |   | 392 |   |
|                                           |   |                   |   |   |                  |   |   |   |
| Total                                          |   | $                      | 9,804  |   |                  | $      | 8,489 |   |
|                                           |   |                   |   |   |                  |   |   |   |

| NOTE      6   - | ASSETS      HELD FOR SALE  |
|--------------------------------|---------------------------------|

| in      thousands                        |   | November      14, 2009 |   |   | February      7, 2009 |   |
|------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                     |   |                   |   |   |                  |   |
| Land                                     |   | $                      | 2,338  |   |                  | $      | 1,473 |   |
| Buildings      and building improvements |   |                   | 4,239  |   |                  |   | 5,142 |   |
|                                     |   |                   |   |   |                  |   |   |   |
| Assets      held for sale                |   | $                      | 6,577  |   |                  | $      | 6,615 |   |
|                                     |   |                   |   |   |                  |   |   |   |

| NOTE      7   - | GOODWILL      AND INTANGIBLE ASSETS  |
|--------------------------------|-------------------------------------------|

| in  thousands                     |   | November      14, 2009 |   |   | February      7, 2009 |   |
|---------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
|                                        |   |                   |   |   |                  |   |
| PCA      acquisition                        |   | $                      | 21,227 |   |                  | $      | 21,227 |   |
|                                        |   |                   |   |   |                  |   |   |   |
| Goodwill      from prior acquisitions       |   |                   | 512    |   |                  |   | 512 |   |
|                                        |   |                   |   |   |                  |   |   |   |
| Translation      impact on foreign balances |   |                   | 20     |   |                  |   | (280 | ) |
|                                        |   | $                      | 21,759 |   |                  | $      | 21,459 |   |
|                                        |   |                   |   |   |                  |   |   |   |

| in      thousands            |   | Net      Balance at      |   |   |         |   |   |                                                 |   |   |                                  |   |
|------------------------------|--------|--------------------------|--------|--------|--------------|--------|--------|-------------------------------------------------|--------|--------|---------------------------------------|--------|
|                         |   | Beginning      of Period |   |   | Amortization |   |   | Translation      Impactof      Foreign Balances |   |   | Net      Balance atEnd      of Period |   |
|                         |   |                     |   |   |         |   |   |                                            |   |   |                                  |   |
| Acquired      host agreement |   | $                        | 39,398 |   |         | $      | (1,548 | )                                               |   | $      | 982                                   |   |   | $ | 38,832 |   |
| Acquired      customer list  |   |                     | 808    |   |         |   | (308   | )                                               |   |   | 17                                    |   |   |   | 517 |   |
|                         |   | $                        | 40,206 |   |         | $      | (1,856 | )                                               |   | $      | 999                                   |   |   | $ | 39,349 |   |
|                         |   |                     |   |   |         |   |   |                                            |   |   |                                  |   |   |   |   |   |

| NOTE      8   - | OTHER      ASSETS AND OTHER LIABILITIES  |
|--------------------------------|-----------------------------------------------|

| NOTE      9   - | BORROWINGS  |
|--------------------------------|------------------|

| NOTE      10   - | STOCK-BASED      COMPENSATION PLANS AND STOCKHOLDERS’ EQUITY  |
|---------------------------------|--------------------------------------------------------------------------|

|                                                                                                                      |   | Options      Outstanding and Exercisable                                                                            |
|---------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|
|                                                                                                                      |   |                                                                                                                |   | Weighted-Average |   |   |   |   |   |   |
| Range      of                                                                                                             |   | Number      of Shares                                                                                               |   | Remaining      Contractual |   | Weighted-Average |   | Number      of Shares |   | Weighted      Average |
| Exercise      Prices                                                                                                      |   | Outstanding                                                                                                         |   | Life      (Years) |   | Exercise      Price |   | Exercisable |   | Exercise      Price |
| $                 12.21      - 13.58 |   |                   217,500 |   |                                 7.42 |   |  $                      13.04 |   |                                   - |   |  $                             - |
|                                                                                                                      |   |                                                                                                                |   |   |   |   |   |   |   |   |
| Total                                                                                                                     |   |                   217,500 |   |                                 7.42 |   |  $                      13.04 |   |                                   - |   |  $                             - |
|                                                                                                                      |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |

| Options      Outstanding and Exercisable                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                  |   |   |   | Weighted-Average |   |   |
|                                                                                                                                                                                                  |   |   |   | Remaining      Contractual |   | Weighted-Average |
| Exercise      Price                                                                                                                                                                                   |   | Shares |   | Life      (Years) |   | Exercise      Price |
|  $                             12.96            |   |                     10,046 |   |                                 0.93 |   |  $                      12.96 |
|                                 17.00 |   |                       5,000 |   |                                 0.42 |   |                          17.00 |
|                                                                                                                                                                                                  |   |   |   |   |   |   |
| Total                                                                                                                                                                                                 |   |                     15,046 |   |                                 0.76 |   |  $                      14.30 |
|                                                                                                                                                                                                  |   |   |   |   |   |   |

|                                          |   | 40      Weeks Ended November 14, 2009 |    |
|-----------------------------------------------|--------|---------------------------------------|---------|
|                                          |   |                                  |    |   | Weighted-Average |   |
|                                          |   | Shares                                |    |   | Grant-Date      Value |   |
| Nonvested      stock, beginning of period     |   |                                  | 1,056   |   |   | $ | 18.95 |   |
| Granted                                       |   |                                  | 93,196  |   |   |   | 8.96 |   |
| Vested                                        |   |                                  | (22,687 | ) |   |   | 10.06 |   |
| Forfeited                                     |   |                                  | (5,252  | ) |   |   | 6.70 |   |
|                                          |   |                                  |    |   |   |   |   |   |
| Nonvested      stock, end of period           |   |                                  | 66,313  |   |   | $ | 8.92 |   |
|                                          |   |                                  |    |   |   |   |   |   |
| Stock-based      compensation expense related |   |                                  |    |   |   |   |   |   |
| to      nonvested stock                       |   | $                                     | 667,408 |   |   |   |   |   |
|                                          |   |                                  |    |   |   |   |   |   |

| NOTE      11   - | EMPLOYEE      BENEFIT PLANS  |
|---------------------------------|-----------------------------------|

| in      thousands                                               |   | 16      Weeks Ended    |   |   | 16      Weeks Ended               |   |
|-----------------------------------------------------------------|--------|------------------------|--------|--------|-----------------------------------|--------|
|                                                            |   | Pension      Plan      |   |   | Supplemental      Retirement Plan |   |
|                                                            |   | November      14, 2009 |   |   | November      8, 2008             |   |   | November      14, 2009 |   |   | November      8, 2008 |   |
| Components      of net periodic benefit costs:                  |   |                   |   |   |                              |   |   |   |   |   |   |   |
|     Service      cost                       |   | $                      | -      |   |                              | $      | 83 |   |   | $ | - |   |   | $ | 22 |   |
|     Interest cost                           |   |                   | 951    |   |                              |   | 923 |   |   |   | 26 |   |   |   | 65 |   |
|     Expected return on plan      assets     |   |                   | (967   | )      |                              |   | (996 | ) |   |   | - |   |   |   | - |   |
|     Amortization of prior service      cost |   |                   | -      |   |                              |   | 14 |   |   |   | - |   |   |   | 9 |   |
|     Amortization of net loss      (gain)    |   |                   | 78     |   |                              |   | 215 |   |   |   | (47 | ) |   |   | (18 | ) |
|                                                            |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost                                  |   | $                      | 62     |   |                              | $      | 239 |   |   | $ | (21 | ) |   | $ | 78 |   |
|                                                            |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| in      thousands                                               |   | 40      Weeks Ended    |   |   | 40      Weeks Ended               |   |
|                                                            |   | Pension      Plan      |   |   | Supplemental      Retirement Plan |   |
|                                                            |   | November      14, 2009 |   |   | November      8, 2008             |   |   | November      14, 2009 |   |   | November      8, 2008 |   |
| Components      of net periodic benefit costs:                  |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                                               |   | $                      | -      |   |                              | $      | 207 |   |   | $ | - |   |   | $ | 55 |   |
| Interest      cost                                              |   |                   | 2,378  |   |                              |   | 2,305 |   |   |   | 65 |   |   |   | 163 |   |
| Expected      return on plan assets                             |   |                   | (2,418 | )      |                              |   | (2,488 | ) |   |   | - |   |   |   | - |   |
| Amortization      of prior service cost                         |   |                   | -      |   |                              |   | 34 |   |   |   | - |   |   |   | 24 |   |
| Amortization      of net loss (gain)                            |   |                   | 196    |   |                              |   | 537 |   |   |   | (116 | ) |   |   | (46 | ) |
|                                                            |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost                                  |   | $                      | 156    |   |                              | $      | 595 |   |   | $ | (51 | ) |   | $ | 196 |   |
|                                                            |   |                   |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |

| NOTE      12   - | INCOME      TAXES |
|---------------------------------|-------------------|

| ·  | Unrecognized      tax benefits were approximately $2.7 million at both November 14, 2009,      and February 7, 2009.  If these unrecognized tax benefits were      recognized, approximately $2.7 million would impact the effective tax      rate.  It is not expected the amount of these unrecognized tax      benefits will change in the next 12 months.   |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | The      Company recognizes interest expense and penalties related to the      above-unrecognized tax benefits within income tax expense.  Due      to the nature of the unrecognized tax benefits, the Company had $82,000      and $36,000 accrued interest and penalties as of November 14, 2009,      and February 7, 2009, respectively.                        |
| ·  | The      Company and its subsidiaries file income tax returns in the U.S. federal      jurisdiction, many states, Mexican and Canadian      jurisdictions.  The Company is no longer subject to U.S. Federal      income tax examination for the years prior to 2003.   There      are currently no ongoing examinations by state taxing      authorities. |

| NOTE      13   - | COMMITMENTS      AND CONTINGENCIES |
|---------------------------------|------------------------------------|

Legal Proceedings

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

|                                              |   | November      14, 2009 |   |   | November      8, 2008 |   |
|---------------------------------------------------|--------|------------------------|--------|--------|-----------------------|--------|
| Within      Sears stores:                         |   |                   |   |   |                  |   |
| United      States and Puerto Rico                |   |                   | 873    |   |                  |   | 891 |   |
| Canada                                            |   |                   | 110    |   |                  |   | 110 |   |
|                                              |   |                   |   |   |                  |   |   |   |
| Within      Walmart stores:                       |   |                   |   |   |                  |   |   |   |
| United      States and Puerto Rico                |   |                   | 1,552  |   |                  |   | 1,656 |   |
| Canada                                            |   |                   | 259    |   |                  |   | 254 |   |
| Mexico                                            |   |                   | 115    |   |                  |   | 118 |   |
|                                              |   |                   |   |   |                  |   |   |   |
| Locations      not within Sears or Walmart stores |   |                   | 29     |   |                  |   | 33 |   |
|                                              |   |                   |   |   |                  |   |   |   |
| Total                                             |   |                   | 2,938  |   |                  |   | 3,062 |   |
|                                              |   |                   |   |   |                  |   |   |   |

| in      thousands, except share and per share data                                                        |   | 16      Weeks Ended    |      |   | 40      Weeks Ended   |   |
|-----------------------------------------------------------------------------------------------------------|--------|------------------------|-----------|--------|-----------------------|--------|
|                                                                                                      |   | November      14, 2009 |      |   | November      8, 2008 |   |   | November      14, 2009 |   |   | November      8, 2008 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |
| Net      sales                                                                                            |   | $                      | 107,286   |   |                  | $      | 115,689 |   |   | $ | 282,130 |   |   | $ | 308,619 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Cost      and expenses:                                                                                   |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           Cost of sales (exclusive of depreciation and amortization shown      below) |   |                   | 8,032     |   |                  |   | 11,288 |   |   |   | 21,643 |   |   |   | 31,412 |   |
|           Selling, general and administrative expenses                                |   |                   | 99,940    |   |                  |   | 109,552 |   |   |   | 245,480 |   |   |   | 269,761 |   |
|           Depreciation and amortization                                               |   |                   | 6,320     |   |                  |   | 8,616 |   |   |   | 17,913 |   |   |   | 21,673 |   |
|           Other charges and impairments                                               |   |                   | 1,144     |   |                  |   | 2,092 |   |   |   | 3,751 |   |   |   | 4,946 |   |
|                                                                                                      |   |                   | 115,436   |   |                  |   | 131,548 |   |   |   | 288,787 |   |   |   | 327,792 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from operations                                                                                 |   |                   | (8,150    | )      |                  |   | (15,859 | ) |   |   | (6,657 | ) |   |   | (19,173 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                                                                     |   |                   | 2,542     |   |                  |   | 3,866 |   |   |   | 5,961 |   |   |   | 6,753 |   |
| Interest      income                                                                                      |   |                   | 130       |   |                  |   | 87 |   |   |   | 370 |   |   |   | 567 |   |
| Other      income, net                                                                                    |   |                   | 236       |   |                  |   | 56 |   |   |   | 253 |   |   |   | 59 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Loss      before income tax benefit                                                                       |   |                   | (10,326   | )      |                  |   | (19,582 | ) |   |   | (11,995 | ) |   |   | (25,300 | ) |
| Income      tax benefit                                                                                   |   |                   | (3,524    | )      |                  |   | (6,507 | ) |   |   | (4,094 | ) |   |   | (8,727 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss from continuing operations                                                                  |   |                   | (6,802    | )      |                  |   | (13,075 | ) |   |   | (7,901 | ) |   |   | (16,573 | ) |
| Net      loss from discontinued operations                                                                |   |                   | -         |   |                  |   | (266 | ) |   |   | - |   |   |   | (625 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS                                                                                             |   | $                      | (6,802    | )      |                  | $      | (13,341 | ) |   | $ | (7,901 | ) |   | $ | (17,198 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS PER COMMON SHARE                                                                            |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss per share from continuing operations - diluted                                              |   | $                      | (0.97     | )      |                  | $      | (2.02 | ) |   | $ | (1.13 | ) |   | $ | (2.56 | ) |
| Net      loss per share from discontinued operations - diluted                                            |   |                   | -         |   |                  |   | (0.04 | ) |   |   | - |   |   |   | (0.10 | ) |
| Net      loss per share - diluted                                                                         |   | $                      | (0.97     | )      |                  | $      | (2.06 | ) |   | $ | (1.13 | ) |   | $ | (2.66 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss per share from continuing operations - basic                                                |   | $                      | (0.97     | )      |                  | $      | (2.02 | ) |   | $ | (1.13 | ) |   | $ | (2.56 | ) |
| Net      loss per share from discontinued operations - basic                                              |   |                   | -         |   |                  |   | (0.04 | ) |   |   | - |   |   |   | (0.10 | ) |
| Net      loss per share - basic                                                                           |   | $                      | (0.97     | )      |                  | $      | (2.06 | ) |   | $ | (1.13 | ) |   | $ | (2.66 | ) |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of common and common equivalent                                              |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           shares outstanding - diluted                                                |   |                   | 7,003,832 |   |                  |   | 6,479,496 |   |   |   | 6,987,746 |   |   |   | 6,467,352 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of common and common equivalent                                              |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|           shares outstanding - basic                                                  |   |                   | 7,003,832 |   |                  |   | 6,479,496 |   |   |   | 6,987,746 |   |   |   | 6,467,352 |   |
|                                                                                                      |   |                   |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |

| ·   | Net      sales for the fiscal 2009 third quarter decreased $8.4 million, or 7.2%,      to $107.3 million from the $115.7 million reported in the third quarter of      2008.  Excluding negative impacts of net revenue recognition      change ($3.5 million) and store closures ($2.7 million) and the      positive effect of a shift in calendar end of the quarter, comparable      same-store sales decreased approximately 7.2%.  The calendar      adjustment accounts for the shift in the Veteran’s Day week from the      fourth quarter in 2008 to the third quarter in 2009.  Veteran’s      Day week initiates the holiday season for portrait activity, and      therefore, this adjustment was necessary to achieve      comparability. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      sales from the Company’s PictureMe Portrait Studio® brand (PMPS), on a      comparable same-store basis, excluding impacts of net revenue recognition      change, loyalty program revenue deferral, store closures and other items,      totaling $0.9 million, increased 4.5% in the third quarter of 2009 to      $60.7 million from $58.1 million in the third quarter of      2008.  The improved PMPS sales performance for the third quarter      was the result of an approximate 24.9% increase in average sale per      customer sitting, offset in part by an approximate 16.4% decline in the      number of sittings. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      the third quarter of 2009, net sales from the Company’s Sears Portrait      Studio brand (SPS), on a comparable same-store basis, excluding impacts of      net revenue recognition change, loyalty program revenue deferral, store      closures and other items, totaling $1.1 million, was $52.9 million, a      decrease of 17.7% from $64.4 million in the third quarter of      2008.  SPS sales performance for the third quarter was the      result of a decline of approximately 18.9% in the number of sittings,      offset slightly by an increase of 1.5% in sales per    sitting. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost      of sales, excluding depreciation and amortization expense was $8.0 million      in the third quarter of 2009, compared with $11.3 million in the third      quarter of 2008.  The decrease is principally attributable      to lower overall manufacturing production levels, improved productivity      due to lab consolidations, the elimination of film and related      shipping costs stemming from the PMPS digital conversion, and decreased      overhead costs resulting from the integration of the PMPS      operations. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,      general and administrative (SG&A) expenses were $99.9 million for the      third quarter of 2009, compared with $109.6 million in the third quarter      of 2008.  The decrease in SG&A expenses primarily relates to      lower studio employment costs of $3.0 million due to scheduling      improvements and selected operating hour reductions; lower other      employment costs of $1.5 million primarily due to changes in exchange      rates, cost control and lower sales levels; fiscal 2008 nonrecurring costs      of $1.7 million associated with the PMPS digital conversion; elimination      of duplicative costs in connection with the PMPS integration totaling $1.3      million; reduced employee insurance costs of $1.3 million due to lower      participation and claims levels; reduced workers’ compensation expense of      $1.2 million due to improved claims management; and $3.0 million in other      cost reductions attributable to cost control initiatives, operating      efficiencies and lower sales levels.  These decreases were      offset in part by increases in higher average hourly studio rates of      approximately $1.2 million in connection with new studio and field      initiatives; an increase due to a change in the estimate methods used for      recognizing advertising cost of $0.9 million; and increased host      commission rates per contractual agreements of  $1.2      million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation      and amortization expense was $6.3 million in the third quarter of 2009,      compared with $8.6 million in the third quarter of      2008.  Depreciation expense decreased due to a      reduction in expense related to the streamlining of manufacturing      facilities as well as certain assets from the SPS digital conversion      that have become fully depreciated in fiscal 2009;  however, it was      offset in part by an increase as a result of the digital equipment      purchased for the PMPS digital conversion throughout fiscal      2008 |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      the third quarter of 2009, the Company recognized $1.1 million in other      charges and impairments, compared with $2.1 million recognized in the      third quarter of 2008.  The current-year charges are primarily      associated with lab closures.  The prior-year charges are      primarily associated with approximately $0.5 million of litigation costs,      $0.7 million of fees incurred in connection with the settlement of the      previous Sears license agreement, and $0.9 million of PMPS integration      charges, including severance and lab closure  costs. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      sales for the first three quarters of 2009 decreased $26.5 million, or      8.6% to $282.1 million from the $308.6 million reported in the first three      quarters of 2008.  Excluding the negative impacts of store      closures ($6.0 million), net revenue recognition change ($4.3 million),      revenue deferral related to positive response to the Company’s loyalty      programs ($4.2 million), and other net adjustments ($0.9      million),  and the positive effects of a shift in calendar end of the      quarter ($5.5 million) and foreign currency translation ($4.9 million),      comparable same-store sales decreased $11.7 million, or      3.8%.  The calendar adjustment accounts for the shift in the      Veteran’s Day week from the fourth quarter in 2008 to the third quarter in      2009.  Veteran’s Day week initiates the holiday season for      portrait activity, and therefore, this adjustment was necessary to achieve      comparability.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      sales from the Company’s PictureMe Portrait Studio® brand (“PMPS”), on a      comparable same-store basis, excluding impacts of foreign currency      translation, store closures, net revenue recognition change, loyalty      program revenue deferral and other items, totaling ($12.9) million,      increased 10.4%, in the first three quarters of 2009 to $158.1 million      from $143.2 million in the first three quarters of      2008.  PMPS sales performance for the first three quarters was      the result of an approximate 37.5% increase in average sale per customer      sitting, offset in part by an approximate 19.7% decline in the number of      sittings.  The Company attributes its increase in average sale      per customer sitting primarily to customers’ positive response to the new      offerings made possible by the recently completed digital conversion and      the implementation of new sales and performance management      processes.  The Company believes the sittings decline reflects      the difficult economic environment, which has especially pressured      customer demand in lower incomecategories. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      sales from the Company’s Sears Portrait Studio brand (“SPS”), on a      comparable same-store basis, excluding impacts of loyalty program revenue      deferral, foreign currency translation, net revenue recognition change,      store closures and other items, totaling ($2.2) million, decreased to      $136.3 million, a decrease of 16.3%, from the $163.0 million in the      first three quarters of 2008.  SPS sales performance for the      first three quarters was the result of declines in the number of sittings      and sales per sitting of approximately 16.3% and 0.1%,      respectively.   The Company believes the decline in SPS      brand sales reflects the difficult economic environment, which pressured      sittings volumes (particularly in the off-season) and led to an especially      pronounced reduction in walk-in business not tied to the Company’s direct      marketing programs.  The Company believes declines have been      mitigated in part by improving execution of the Company’s customer      outreach and loyalty programs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost      of sales, excluding depreciation and amortization expense, was $21.6      million in the first three quarters of 2009, compared with $31.4 million      in the first three quarters of 2008.   The decrease is      principally attributable to lower overall manufacturing production levels,      improved product mix, increased manufacturing productivity, the      elimination of film and related shipping costs stemming from the PMPS      digital conversion, and decreased overhead costs resulting from the      integration of the PMPS operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,      general and administrative (“SG&A”) expenses were $245.5 million for      the first three quarters of 2009, compared with $269.8 million in the      first three quarters of 2008.  The decrease in SG&A expenses      primarily relates to lower studio employment costs of $8.7 million due to      scheduling improvements and selected operating hour reductions; fiscal      2008 nonrecurring costs of $5.3 million associated with the PMPS digital      conversion; lower field and other employment costs of $4.1 million      primarily due to restructuring field management, changes in exchange      rates, cost control and lower sales levels; elimination of duplicative      costs in connection with the PMPS integration totaling $3.8 million;      reduced workers’ compensation expense of $2.4 million due to improved      claims management; reduced employee insurance costs of $2.4 million      related to lower participation and claims levels; and $5.4 million in      other net cost reductions attributable to cost control initiatives,      operating efficiencies and lower sales levels.  These decreases      were offset in part by increases in higher average hourly studio rates of      approximately $4.6 million in connection with new studio and field      initiatives; and increased host commission rates per contractual      agreements of  $3.2million. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation      and amortization decreased to $17.9 million in the first three quarters of      2009 from $21.7 million in the first three quarters of      2008.  The decrease in depreciation and amortization is      primarily attributable to certain assets, acquired in connection with the      2007 acquisition of PCA, becoming fully depreciated subsequent to the      prior-year first quarter and a reduction in expense related to the      streamlining of manufacturing facilities.  This decrease is      offset in part by an increase in depreciation attributable to the      equipment purchased for the PMPS digital conversion throughout fiscal year      2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      the first three quarters of 2009, the Company recognized $3.8 million in      other charges and impairments, compared with $4.9 million recognized in      the first three quarters of 2008.  The current year charges are      primarily associated with certain PMPS integration charges, including      severance of $1.0 million and lab closure costs of $1.4 million, proxy      contest fees of $0.9 million, and litigation costs of $0.5      million.  The prior-year charges are primarily associated with      certain fees incurred in connection with the settlement of the previous      Sears license agreement of $1.7 million, litigation costs of $1.5 million,      and certain PMPS integration charges, including severance and lab closure      costs of $1.7 million. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| in      thousands                            |   | 40      Weeks Ended    |    |
|----------------------------------------------|--------|------------------------|---------|
|                                         |   | November      14, 2009 |    |   | November      8, 2008 |   |
| Net      cash provided by (used in):         |   |                   |    |   |   |   |
| Operating      activities                    |   | $                      | 142     |   |   | $ | (13,653 | ) |
| Financing      activities                    |   |                   | (12,563 | ) |   |   | (6,137 | ) |
| Investing      activities                    |   |                   | (3,052  | ) |   |   | (31,101 | ) |
| Effect      of exchange rate changes on cash |   |                   | 93      |   |   |   | (163 | ) |
| Net      decrease in cash                    |   | $                      | (15,380 | ) |   | $ | (51,054 | ) |
|                                         |   |                   |    |   |   |   |   |   |

| Item 3. |   | Quantitative      and Qualitative Disclosures About MarketRisk |
|---------|--------|----------------------------------------------------------------|

| Notional      amount        |   | $                       | 57,500,000 |   |
|-----------------------------|--------|-------------------------|------------|--------|
|                        |   |                    |       |   |
| Fixed      rate paid        |   |                    | 4.97       | %      |
|                        |   |                    |       |   |
| Variable      rate received |   |                    | 0.25       | %      |
|                        |   |                    |       |   |
| Effective      date         |   | September      17, 2007 |       |
|                        |   |                    |       |   |
| Expiration      date        |   | September      17, 2010 |       |

| Item 4. |   | Controls      and Procedures |
|---------|--------|------------------------------|

| a)   | Evaluation      of Disclosure Controls andProcedures |
|----------------|------------------------------------------------------|

| b)   | Changes      in Internal Control Over FinancialReporting |
|----------------|----------------------------------------------------------|

| Item 6. | Exhibits |   |
|---------|----------|--------|

SIGNATURES

EXHIBIT INDEX

| 10.58  |   | Amendment      to Chairman's Agreement by and between CPI Corp. and David Meyer, dated      September 25, 2009.                   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   |   | (Confidential      treatment requested for portions of this document.)                                                            |
|   |   |                                                                                                                              |
| 11.1   |   | Computation      of Per Common Share Loss - Diluted - for the 16 and 40 weeks ended      November 14, 2009, and November 8, 2008. |
|   |   |                                                                                                                              |
| 11.2   |   | Computation      of Per Common Share Loss - Basic - for the 16 and 40 weeks ended November      14, 2009, and November 8, 2008.   |
|   |   |                                                                                                                              |
| 31.1   |   | Certification      Pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934      by the Chief Executive Officer.  |
|   |   |                                                                                                                              |
| 31.2   |   | Certification      Pursuant to Rule 13a-14(a) under the Securities and Exchange Act of 1934      by the Chief Financial Officer.  |
|   |   |                                                                                                                              |
| 32.0   |   | Certification      Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002  |
|   |   | by      the Chief Executive Officer and the Chief Financial    Officer.                                                           |