----

----

| 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) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|

|  Title of each classCommon Stock, par value $0.40 per      share |  Name of each exchange on which      registeredNew York Stock      Exchange |
|-----------------------------------------------------------------------|----------------------------------------------------------------------------------|

----

----

| PART      I   |   |                                                              |                                                   |   |
|---------------|--------|-------------------------------------------------------------------|--------------------------------------------------------|--------|
|          |   |                                                              |                                                   |   |
| Item 1.       |   | Business                                                          |                                                   | 3      |
| Item 1A.      |   | Risk      Factors                                                 |                                                   | 9      |
| Item 1B.      |   | Unresolved      Staff Comments                                    |                                                   | 12     |
| Item 2.       |   | Properties                                                        |                                                   | 12     |
| Item 3.       |   | Legal      Proceedings                                            |                                                   | 13     |
| Item 4.       |   | Submission      of Matters to a Vote of Security Holders          |                                                   | 13     |
|          |   |                                                              |                                                   |   |
| PART      II  |   |                                                              |                                                   |   |
|          |   |                                                              |                                                   |   |
| Item 5.       |   | Market      for Registrant's Common Equity, Related Stockholder   |                                                   |   |
|          |   |                                                              | Matters      and Issuer Purchases of Equity Securities |   | 13 |
| Item 6.       |   | Selected      Consolidated Financial Data                         |                                                   | 14     |
| Item 7.       |   | Management's      Discussion and Analysis of                      |                                                   |   |
|          |   |                                                              | Financial      Condition and Results of Operations     |   | 16 |
| Item 7A.      |   | Quantitative      and Qualitative Disclosures About               |                                                   |   |
|          |   |                                                              | Market      Risk                                       |   | 29 |
| Item 8.       |   | Financial      Statements and Supplementary Data                  |                                                   | 29     |
| Item 9.       |   | Changes      in and Disagreements with Accountants                |                                                   |   |
|          |   |                                                              | on      Accounting and Financial Disclosure            |   | 71 |
| Item 9A.      |   | Controls      and Procedures                                      |                                                   | 71     |
| Item 9B.      |   | Other      Information                                            |                                                   | 73     |
|          |   |                                                              |                                                   |   |
| PART      III |   |                                                              |                                                   |   |
|          |   |                                                              |                                                   |   |
| Item 10.      |   | Directors,      Executive Officers and Corporate Governance       |                                                   | 73     |
| Item 11.      |   | Executive      Compensation                                       |                                                   | 73     |
| Item 12.      |   | Security      Ownership of Certain Beneficial Owners              |                                                   |   |
|          |   |                                                              | and      Management and Related Stockholder Matters    |   | 73 |
| Item 13.      |   | Certain      Relationships and Related Transactions, and Director |                                                   |   |
|          |   |                                                              | Independence                                           |   | 74 |
| Item 14.      |   | Principal      Accounting Fees and Services                       |                                                   | 74     |
|          |   |                                                              |                                                   |   |
| PART      IV  |   |                                                              |                                                   |   |
|          |   |                                                              |                                                   |   |
| Item      15. |   | Exhibits and Financial Statement      Schedules                   |                                                   | 74     |
|          |   | Signatures                                                        |                                                   | 80     |

| Item 1. | Business |
|---------|----------|

| Item 1A. |         Risk Factors |
|----------|--------------------------------|

| Item 1B. | Unresolved      Staff Comments |
|----------|--------------------------------|

| Item 2. | Properties |
|---------|------------|

|                           |   | APPROXIMATE                                                                                                              |   |                                                                                                 |   |          |   |
|--------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                           |   | AREA      IN                                                                                                             |   |                                                                                                 |   | OWNERSHIP     |   |
| LOCATION                       |   | SQUARE      FEET                                                                                                         |   | PRIMARY      USES                                                                                    |   | OR      LEASE |   |
| Matthews,      North Carolina  |   |                  860,000            |   | Administration      and Portrait processing (includes 696,000 square feet in    land)                |   | Owned         | (1)    |
| Thomaston,      Connecticut    |   |                  386,000            |   | Administration      and Portrait processing (includes 361,000 square feet in    land)                |   | Owned         | (2)    |
| Charlotte,      North Carolina |   |                  372,000            |   | Administration,      Warehousing and Portrait processing (includes 315,000 square feet in      land) |   | Owned         |   |
| Charlotte,      North Carolina |   |                  348,000            |   | Undeveloped,      industrial land                                                                    |   | Owned         | (1)    |
| St.      Louis, Missouri       |   |                  341,000            |   | Headquarters,      Administration and Portrait processing (includes 31,000 square feet in      land) |   | Owned         |   |
| St.      Louis, Missouri       |   |                  159,000            |   | Parking      Lots                                                                                    |   | Owned         |   |
| Brampton,      Ontario         |   |                  156,000            |   | Administration,      Warehousing and Portrait processing (includes 116,000 square feet in      land) |   | Owned         |   |
| Charlotte,      North Carolina |   |                  147,000            |   | Warehousing      (includes 116,000 square feet in land)                                              |   | Owned         | (1)    |
| St.      Louis, Missouri       |   |                    53,000 |   | Warehousing                                                                                          |   | Leased        | (3)    |
| Charlotte,      North Carolina |   |                    51,000 |   | Parking      Lots                                                                                    |   | Owned         |   |
| St.      Louis, Missouri       |   |                    20,000 |   | Storage      Facility                                                                                |   | Leased        | (4)    |

| (1) |   | Properties      are held for sale.  See Note 7 to the Company's Consolidated      Financial Statements for further discussion. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Property      was listed for sale as of March 9, 2009.                                                                                   |
| (3) |   | Lease      term expires on July 31, 2018.                                                                                                |
| (4) |   | Lease      term expired on February 28, 2009, and we have vacated the      space.                                                        |

| NUMBER                                                                                                                           |   |                                                     |   |                                                                                            |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|
| OF      STUDIOS                                                                                                                  |   | COUNTRY                                                  |   | LICENSOR/LESSOR                                                                                 |
|                                                                                                                             |   |                                                     |   |                                                                                            |
|                    887            |   | United      States and Puerto Rico                       |   | Sears                                                                                           |
|                 1,642                            |   | United      States and Puerto Rico                       |   | Wal-Mart                                                                                        |
|                    110            |   | Canada                                                   |   | Sears      Canada, Inc.                                                                         |
|                    259            |   | Canada                                                   |   | Wal-Mart      Canada Corp.                                                                      |
|                    118            |   | Mexico                                                   |   | Nueva      Wal-Mart de Mexico, S, de R.L. de C.V.                                               |
|                      30 |   | United      States studios not in      Sears or Wal-Mart |   | Third      parties - generally leased for at least 3 years with      some having renewaloptions |

| Item 3. | Legal      Proceedings |
|---------|------------------------|

| Item 4. | Submission      of Matters to a Vote of Security Holders |
|---------|----------------------------------------------------------|

| Item 5. | Market      for Registrant's Common Equity, Related Stockholder Matters and Issuer      Purchases of Equity Securities |
|---------|------------------------------------------------------------------------------------------------------------------------|

| FISCAL      YEAR 2008          |   |   |   |   |   |   |   |     |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
| (ending      February 7, 2009) |   | HIGH   |   |   | LOW    |   |   | DIVIDEND |   |
| First      Quarter             |   | $      | 20.25  |   |   | $      | 15.17  |     |   | $ | 0.16 |   |
| Second      Quarter            |   |   | 26.73  |   |   |   | 13.79  |     |   |   | 0.16 |   |
| Third      Quarter             |   |   | 16.44  |   |   |   | 5.57   |     |   |   | 0.16 |   |
| Fourth      Quarter            |   |   | 7.14   |   |   |   | 1.08   |     |   |   | 0.16 |   |
|                           |   |   |   |   |   |   |   |     |   |   |   |   |

| FISCAL      YEAR 2007          |   |   |   |   |   |   |   |     |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
| (ending      February 2, 2008) |   | HIGH   |   |   | LOW    |   |   | DIVIDEND |   |
| First      Quarter             |   | $      | 58.20  |   |   | $      | 50.00  |     |   | $ | 0.16 |   |
| Second      Quarter            |   |   | 84.40  |   |   |   | 57.51  |     |   |   | 0.16 |   |
| Third      Quarter             |   |   | 65.78  |   |   |   | 30.36  |     |   |   | 0.16 |   |
| Fourth      Quarter            |   |   | 30.84  |   |   |   | 17.11  |     |   |   | 0.16 |   |
|                           |   |   |   |   |   |   |   |     |   |   |   |   |

| Item 6. | Selected      Consolidated Financial Data |
|---------|-------------------------------------------|

| in      thousands except share and per share data                                                       |   | 2008   |    |   | 2007   |   |    | 2006   |   |   | 2005    |   |   | 2004   |    |
|---------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| STATEMENT      OF OPERATIONS (1)                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|         Net sales                                                                             |   | $      | 462,548 |   |   | $      | 423,429 |   |   | $      | 292,973 |   |   | $      | 291,098 |   |   | $ | 280,845 |   |
|         Cost of sales (exclusive of depreciation and amortization shown      below)           |   |   | 41,218  |   |   |   | 45,284  |   |   |   | 28,582  |   |   |   | 32,597  |   |   |   | 33,677 |   |
|         Selling, general and administrative expenses                                          |   |   | 379,372 |   |   |   | 328,419 |   |   |   | 219,911 |   |   |   | 223,762 |   |   |   | 221,715 |   |
|         Depreciation and amortization                                                         |   |   | 29,432  |   |   |   | 27,291  |   |   |   | 16,861  |   |   |   | 19,904  |   |   |   | 16,360 |   |
|         Other charges and impairments (2)                                                     |   |   | 13,557  |   |   |   | 7,695   |   |   |   | 1,241   |   |   |   | 2,767   |   |   |   | 15,679 |   |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         (Loss) income from continuing operations                                              |   |   | (1,031  | )      |   |   | 14,740  |   |   |   | 26,378  |   |   |   | 12,068  |   |   |   | (6,586 | ) |
|         Interest expense, net (3)                                                             |   |   | 8,527   |   |   |   | 8,818   |   |   |   | 1,815   |   |   |   | 1,098   |   |   |   | 981 |   |
|         Recovery (impairment) and related obligations of preferred security      interest (4) |   |   | -       |   |   |   | -       |   |   |   | 887     |   |   |   | -       |   |   |   | (9,789 | ) |
|         Loss from debt extinguishment (5)                                                     |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 529     |   |   |   | - |   |
|         Other income, net                                                                     |   |   | 190     |   |   |   | 175     |   |   |   | 144     |   |   |   | 247     |   |   |   | 263 |   |
|         Income tax (benefit) expense                                                          |   |   | (2,644  | )      |   |   | 2,080   |   |   |   | 9,164   |   |   |   | 1,889   |   |   |   | (2,225 | ) |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Net (loss) income from continuing operations                                          |   |   | (6,724  | )      |   |   | 4,017   |   |   |   | 16,430  |   |   |   | 8,799   |   |   |   | (14,868 | ) |
|         Net (loss) income from discontinued operations, net of tax    (1)                     |   |   | (961    | )      |   |   | (441    | )      |   |   | (103    | )      |   |   | 73      |   |   |   | (3,640 | ) |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|              Net (loss) income                                       |   | $      | (7,685  | )      |   | $      | 3,576   |   |   | $      | 16,327  |   |   | $      | 8,872   |   |   | $ | (18,508 | ) |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| SHARE      AND PER SHARE DATA (1)                                                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Net (loss) income from continuing operations - diluted (6)                            |   | $      | (1.03   | )      |   | $      | 0.63    |   |   | $      | 2.58    |   |   | $      | 1.12    |   |   | $ | (1.88 | ) |
|         Net (loss) income from continuing operations - basic (6)                              |   | $      | (1.03   | )      |   | $      | 0.63    |   |   | $      | 2.59    |   |   | $      | 1.12    |   |   | $ | (1.88 | ) |
|         Net (loss) income - diluted                                                           |   | $      | (1.18   | )      |   | $      | 0.56    |   |   | $      | 2.56    |   |   | $      | 1.13    |   |   | $ | (2.35 | ) |
|         Net (loss) income - basic                                                             |   | $      | (1.18   | )      |   | $      | 0.56    |   |   | $      | 2.57    |   |   | $      | 1.13    |   |   | $ | (2.35 | ) |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Dividends                                                                             |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $ | 0.64 |   |
|         Average shares outstanding - diluted                                                  |   |   | 6,510   |   |   |   | 6,416   |   |   |   | 6,376   |   |   |   | 7,881   |   |   |   | 7,888 |   |
|         Average shares outstanding - basic                                                    |   |   | 6,510   |   |   |   | 6,391   |   |   |   | 6,353   |   |   |   | 7,854   |   |   |   | 7,888 |   |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| CASH      FLOW DATA (continuing operations only)                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Net cash provided by operating activities                                             |   | $      | 12,663  |   |   | $      | 39,872  |   |   | $      | 37,993  |   |   | $      | 18,624  |   |   | $ | 16,371 |   |
|         Net cash (used in) provided by financing activities                                   |   | $      | (13,419 | )      |   | $      | 90,788  |   |   | $      | (43,567 | )      |   | $      | (1,223  | ) |   | $ | (24,827 | ) |
|         Net cash used in investing activities                                                 |   | $      | (33,488 | )      |   | $      | (97,653 | )      |   | $      | (2,358  | )      |   | $      | (17,633 | ) |   | $ | (6,597 | ) |
|                                                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|         Capital expenditures                                                                  |   | $      | 36,074  |   |   | $      | 14,884  |   |   | $      | 2,760   |   |   | $      | 20,235  |   |   | $ | 15,157 |   |

| Item      6. | Selected      Consolidated Financial Data (continued) |
|--------------|-------------------------------------------------------|

| in      thousands                                            |   | 2008   |    |   | 2007   |   |    | 2006   |   |   | 2005   |   |   | 2004   |    |
|--------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|
|                                                         |   |   |    |   |   |   |    |   |   |   |   |   |   |   |    |
| BALANCE      SHEET                                           |   |   |    |   |   |   |    |   |   |   |   |   |   |   |    |
|         Cash and cash equivalents                  |   | $      | 23,665  |   |   | $      | 59,177  |   |   | $      | 26,294 |   |   | $      | 34,269  |   |   | $ | 33,883 |   |
|         Current assets                             |   |   | 61,480  |   |   |   | 92,835  |   |   |   | 55,164 |   |   |   | 69,629  |   |   |   | 72,875 |   |
|         Net fixed assets                           |   |   | 50,887  |   |   |   | 56,280  |   |   |   | 26,693 |   |   |   | 41,282  |   |   |   | 41,658 |   |
|         Assets of supplemental retirement plan (7) |   |   | 975     |   |   |   | 3,508   |   |   |   | 3,588  |   |   |   | 3,706   |   |   |   | 6,141 |   |
|         Goodwill and intangible assets (8)         |   |   | 61,664  |   |   |   | 62,956  |   |   |   | 512    |   |   |   | 512     |   |   |   | 512 |   |
|         Other assets                               |   |   | 15,586  |   |   |   | 20,938  |   |   |   | 7,205  |   |   |   | 11,015  |   |   |   | 13,914 |   |
|         Total assets                               |   |   | 190,593 |   |   |   | 236,517 |   |   |   | 93,162 |   |   |   | 126,144 |   |   |   | 135,100 |   |
|         Current liabilities                        |   |   | 55,010  |   |   |   | 83,051  |   |   |   | 49,407 |   |   |   | 56,065  |   |   |   | 69,448 |   |
|         Other liabilities                          |   |   | 32,432  |   |   |   | 33,470  |   |   |   | 23,209 |   |   |   | 25,739  |   |   |   | 25,716 |   |
|         Long-term debt, less current maturities    |   |   | 102,316 |   |   |   | 103,022 |   |   |   | 7,747  |   |   |   | 15,747  |   |   |   | 17,050 |   |
|         Stockholders' equity (6)                   |   |   | 835     |   |   |   | 16,974  |   |   |   | 12,799 |   |   |   | 28,593  |   |   |   | 22,886 |   |

| (1)    |   | The      following business areas were classified as discontinued      operations in the years indicated.  The financial statements for      the periods prior to the classification were reclassified to reflect      these changes: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                      |
|   |   | -      In 2008, Portrait Gallery and E-Church operations                                                                                                                                                                                                  |
|   |   | -      In 2007, UK Operations which were acquired in the PCA      acquisition                                                                                                                                                                             |
|   |   | -      In 2004, mobile photography operations and the Mexican Portrait Studio      business                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                      |
| (2)    |   | Other      charges andimpairments:                                                                                                                                                                                                                        |

| in      thousands                                                                |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sears      fees related to settlement of the previous license agreement      (a) |   | $      | 7,527  |   |   | $      | 2,500  |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |
| Other      transition related costs - PCA Acquisition (b)                        |   |   | 2,121  |   |   |   | 2,817  |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Reserves      for severance and related costs (c)                                |   |   | 2,046  |   |   |   | 2,035  |   |   |   | 878    |   |   |   | 2,546  |   |   |   | 3,430 |   |
| Impairment      charges (d)                                                      |   |   | 739    |   |   |   | 256    |   |   |   | 179    |   |   |   | 567    |   |   |   | 6,516 |   |
| Consent      solicitation (e)                                                    |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 816 |   |
| Accruals      related to accelerated vesting of supplemental                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| retirement      plan benefits and guaranteed bonuses                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for      2004 (f)                                                                |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 3,656 |   |
| Other  (g)                                                             |   |   | 1,124  |   |   |   | 87     |   |   |   | 184    |   |   |   | (346   | ) |   |   | 1,261 |   |
|                                                                             |   | $      | 13,557 |   |   | $      | 7,695  |   |   | $      | 1,241  |   |   | $      | 2,767  |   |   | $ | 15,679 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (a) |   | Consists      of fees and charges incurred in relation to the settlement of the previous      Sears license agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Consists      of integration-related costs relative to the PCA    Acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (c) |   | Consists      principally of expenses and related costs for employee severance,      retirements and repositioning. Specifically, in 2008 and 2007, this cost      is primarily related to the PCA Acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (d) |   | Consists      of 2008 write-downs of certain asset values held for sale, 2007 write-offs      of software that is no longer used in the business, 2006 write-offs of      certain legacy equipment that is no longer used in the business, 2005      parts and film inventory and other asset write-offs resulting from the      conversion from an analog film environment to the full digital format and      2004 write-offs and write-downs of certain previously capitalized      technology costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (e) |   | Consists      of professional fees relative to the proxy consent      solicitation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (f) |   | Consists      of costs related to accelerated vesting of executive benefits and      bonuses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (g) |   | Costs      in 2008 primarily relate to legal expense incurred related to the      settlement of the Portraits International of the Southwest vs. CPI Corp.      case.   Costs in 2007 consist of non-refundable loan commitment      fees as well as charges related to early contract terminations and      settlements with certain of the Company’s vendors and      consultants.  Costs in 2006 represent investment banking and      legal services in connection with the strategic alternative      review.  The net credit in 2005 relates principally to the      favorable settlement of a claim resulting in a refund related to      previously paid loan commitment fees and costs.  Costs in 2004      primarily relate to early contract terminations and settlements with      certain of the Company’s vendors and consultants as a result of strategic      decisions to modify suchrelationships. |

| Item      6. | Selected      Consolidated Financial Data (continued) |
|--------------|-------------------------------------------------------|

| (3)    |   | In      2008 and 2007, includes expense of $617,000 and $2.9 million,      respectively, in connection with marking the interest rate swap agreement      to its market value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (4)    |   | In      2004, the Company recorded a $7.7 million valuation reserve against the      carrying value of its preferred security interest and $2.1 million of      additional accrued lease liability obligations relating to its lease      guarantees on certain of Prints Plus’ retail stores.  As the      total guarantee related to these leases had decreased with the passage of      time, the payment of rents by Prints Plus and the settlement by the      Company of certain leases rejected in bankruptcy, the related liability      was reduced by $887,000 in 2006 to reflect management’s revised estimate      of remaining potential loss. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (5)    |   | Consists      of a make-whole fee totaling $457,000 and the write-off of unamortized      fees, both related to the early redemption of the Company’s Senior Notes      in November 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (6)    |   | The      Company recorded the repurchase of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | -      1,658,607 shares of common stock for $32.4 million in  2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | -      406,780 shares of common stock for $6.0 million in 2004,    and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | -      54,200 shares of common stock for $935,000 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (7)    |   | Represents      a benefit trust established in 2000 to fund supplemental retirement      benefits for certain current and former executives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (8)    |   | At      the time of the PCA Acquisition, the Company acquired a host agreement and      customer list with Wal-Mart and additional goodwill.  See Note 8      to the Notes to Consolidated Financial Statements for further      discussion.                                                                                                                                                                                                                                                                                                                                                                                                                            |

| Item 7. | Management's      Discussion and Analysis of Financial Condition and Results of      Operations |
|---------|-------------------------------------------------------------------------------------------------|

|                                               |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                               |   |   |   |   |   |   |   |   |   |
| Within      Sears stores:                          |   |   |   |   |   |   |   |   |   |
| United      States and Puerto Rico                 |   |   | 887    |   |   |   | 893    |   |   |   | 894 |   |
| Canada                                             |   |   | 110    |   |   |   | 112    |   |   |   | 112 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Within      Wal-Mart stores:                       |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States and Puerto Rico                 |   |   | 1,642  |   |   |   | 1,702  |   |   |   | - |   |
| Canada                                             |   |   | 259    |   |   |   | 253    |   |   |   | - |   |
| Mexico                                             |   |   | 118    |   |   |   | 115    |   |   |   | - |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Locations      not within Sears or Wal-Mart stores |   |   | 30     |   |   |   | 33     |   |   |   | 35 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                              |   |   | 3,046  |   |   |   | 3,108  |   |   |   | 1,041 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands, except share and per share data                                             |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                                           |   |   |    |   |   |   |    |   |   |
| Net      sales                                                                                 |   | $      | 462,548 |   |   | $      | 423,429 |   |   | $ | 292,973 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Cost      and expenses:                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
|         Cost of sales (exclusive of depreciation and amortization shown      below)  |   |   | 41,218  |   |   |   | 45,284  |   |   |   | 28,582 |   |
|         Selling, general and administrative expenses                                 |   |   | 379,372 |   |   |   | 328,419 |   |   |   | 219,911 |   |
|         Depreciation and amortization                                                |   |   | 29,432  |   |   |   | 27,291  |   |   |   | 16,861 |   |
|         Other charges and impairments                                                |   |   | 13,557  |   |   |   | 7,695   |   |   |   | 1,241 |   |
|                                                                                           |   |   | 463,579 |   |   |   | 408,689 |   |   |   | 266,595 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| (Loss)      income from continuing operations                                                  |   |   | (1,031  | )      |   |   | 14,740  |   |   |   | 26,378 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest      expense                                                                          |   |   | 9,147   |   |   |   | 10,652  |   |   |   | 2,380 |   |
| Interest      income                                                                           |   |   | 620     |   |   |   | 1,834   |   |   |   | 565 |   |
| Recovery      of preferred security interest                                                   |   |   | -       |   |   |   | -       |   |   |   | (887 | ) |
| Other      income, net                                                                         |   |   | 190     |   |   |   | 175     |   |   |   | 144 |   |
| (Loss)      income from continuing operations before income tax (benefit)      expense         |   |   | (9,368  | )      |   |   | 6,097   |   |   |   | 25,594 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Income      tax (benefit) expense                                                              |   |   | (2,644  | )      |   |   | 2,080   |   |   |   | 9,164 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      (loss) income from continuing operations                                              |   |   | (6,724  | )      |   |   | 4,017   |   |   |   | 16,430 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      loss from discontinued operations, net of income tax    benefit                       |   |   | (961    | )      |   |   | (441    | )      |   |   | (103 | ) |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| NET      (LOSS) INCOME                                                                         |   | $      | (7,685  | )      |   | $      | 3,576   |   |   | $ | 16,327 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| NET      (LOSS) INCOME PER COMMON SHARE                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      (loss) income per share from continuing operations -    diluted                       |   | $      | (1.03   | )      |   | $      | 0.63    |   |   | $ | 2.58 |   |
| Net      loss per share from discontinued operations - diluted                                 |   |   | (0.15   | )      |   |   | (0.07   | )      |   |   | (0.02 | ) |
| Net      (loss) income per share - diluted                                                     |   | $      | (1.18   | )      |   | $      | 0.56    |   |   | $ | 2.56 |   |
|                                                                                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Weighted      average number of common and common equivalent shares outstanding -      diluted |   |   | 6,510   |   |   |   | 6,416   |   |   |   | 6,376 |   |

| ·   | Net      sales for 2008 increased $39.1 million, or 9%, to $462.5 million from the      $423.4 million reported in 2007 as a result of the inclusion of the full      53 weeks of PMPS operations in 2008 compared with only the 34-week period      of ownership in 2007.    The additional operating week in      2008 resulted in appriximately $7.0 million of net sales but did not      materially impact net income or net income per diluted share.       Declining foreign currency exchange rates had a significant negative      impact of approximately $4.6 million on fiscal 2008 net sales, however,      did not materially affect net income beforetax. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net      sales for 2007 increased $130.4 million, or 45%, to $423.4 million from      the $293.0 million reported in 2006 as a result of the inclusion of net      sales of $148.8 million attributable to the Company’s PMPS      brand.  In accordance with purchase accounting guidelines,      PMPS’s deferred revenue balance at the June 8, 2007, date of acquisition      was reduced by a purchase accounting adjustment to record deferred revenue      at its fair value in the PictureMe Portrait Studio® beginning,      post-acquisition balance sheet.  This purchase accounting      adjustment had the effect of reducing revenue in periods subsequent to the      acquisition for one year.  The deferred revenue adjustment      resulted in a reduction in net sales of $8.2 million and an increased      pre-tax loss from operations of $3.4 million for fiscal    2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost      of sales, excluding depreciation and amortization expense, was $41.2      million, $45.3 million and $28.6 million in 2008, 2007 and 2006,      respectively. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling,      general and administrative (“SG&A”) expenses were $379.4 million,      $328.4 million and $219.9 million for fiscal years 2008, 2007 and 2006,      respectively. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation      and amortization was $29.4 million in 2008, compared to $27.3 million in      2007 and $16.9 million in 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| in      thousands                                                                             |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Sears      fees related to settlement of the previous license agreement      (1)              |   | $      | 7,527  |   |   | $      | 2,500  |   |   | $ | - |   |
| Other      transition related costs - PCA Acquisition (2)                                     |   |   | 2,121  |   |   |   | 2,817  |   |   |   | - |   |
| Reserves      for severance and related costs (3)                                             |   |   | 2,046  |   |   |   | 2,035  |   |   |   | 878 |   |
| Impairment      charges (4)                                                                   |   |   | 739    |   |   |   | 256    |   |   |   | 179 |   |
| Other      (5)                                                                                |   |   | 1,124  |   |   |   | 87     |   |   |   | 184 |   |
|                                                                                          |   |   | 13,557 |   |   |   | 7,695  |   |   |   | 1,241 |   |
| Recorded      as a component of other (expense) income following income      from operations: |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|        Lease      guarantee reserve reduction (6)                                        |   |   | -      |   |   |   | -      |   |   |   | 887 |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|        Total      Other Charges and Impairments                                          |   | $      | 13,557 |   |   | $      | 7,695  |   |   | $ | 354 |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)    |   | Consists      of fees related to the settlement of the previous Sears license      agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (2)    |   | Other      transition related costs – PCA Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | In      2008, costs related to the PCA Acquisition included transition-related      costs associated with combining the operations of PCA into the CPI      organization of $1.1 million and $866,000 related to litigation assumed      with the PCA Acquisition. During      2007, in connection with the PCA Acquisition, the Company incurred      transition-related costs associated with combining the operations of PCA      into the CPI organization ($2.0 million), costs associated with the      closure of the Institutional business acquired from PCA ($265,000) and      costs associated with the transfer of contractual obligations from PCA to      CPI ($523,000). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (3)    |   | Reserves      for severance and related costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | Charges      in 2008 and 2007 were $2.0 million in each year and principally related to      severance costs resulting from the termination of employees in connection      with the integration of operations of the PCA Acquisition into      CPI. Charges      in 2006 were $878,000 and related principally to the separation of      employment of three executives, including the Company’s former      CEO.                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (4)    |   | Impairment      charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   | During      2008, the Company incurred $739,000 primarily related to the write-down of      certain asset values held for sale. During      2007, the Company incurred $256,000 in charges related to software      that is no longer used in the business. During      2006, the Company incurred $179,000 in charges related to the write-off of      certain legacy equipment that is no longer used in the      business.                                                                                                                                                                                                                                                  |

| (5)    |   | Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | Costs      in 2008 primarily include legal charges and a contract negotiation with a      director. Costs      in 2007 related to one-time strategic studies and legal      charges. The      Company began a process to explore strategic alternatives to enhance      shareholder value in 2006.  Investment banking and legal      services in connection with this review totaled $184,000 in      2006.                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (6)    |   | Lease      guarantee reserve reduction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   | The      lease guarantee reserve reduction recorded in 2006 represents a partial      reversal of reserves initially recorded in 2004 related to operating lease      guarantees associated with the Company’s former Wall Décor segment, Prints      Plus.  As the total guarantee related to these leases decreased      with the passage of time, the payment of rents by Prints Plus and the      settlement by the Company of certain leases rejected in bankruptcy, the      related liability was reduced to reflect management’s revised estimate of      remaining potential loss.  This reserve is more fully discussed      in Note 16 in the accompanying Notes to Consolidated Financial      Statements. |

| in      thousands                            |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                         |   |   |    |   |   |   |    |   |   |
| Net      cash (used in) provided by:         |   |   |    |   |   |   |    |   |   |
|  Operating      activities (1)          |   | $      | 11,847  |   |   | $      | 39,466  |   |   | $ | 37,950 |   |
|  Financing      activities              |   |   | (13,419 | )      |   |   | 90,788  |   |   |   | (43,567 | ) |
|  Investing      activities              |   |   | (33,488 | )      |   |   | (97,653 | )      |   |   | (2,358 | ) |
| Effect      of exchange rate changes on cash |   |   | (452    | )      |   |   | 282     |   |   |   | - |   |
| Net      (decrease) increase in cash         |   | $      | (35,512 | )      |   | $      | 32,883  |   |   | $ | (7,975 | ) |
|                                         |   |   |    |   |   |   |    |   |   |   |   |   |

| (1)   | Includes      cash flows used in discontinued operations of $816,000, $406,000 and      $43,000 in 2008, 2007 and 2006,respectively. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------|

| in      thousands                                             |   | PAYMENTS      DUE BY PERIOD |    |
|---------------------------------------------------------------|--------|-----------------------------|---------|
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   | 2014      & |   |
|                                                          |   | Total                       |    |   | 2009 |   |   |   | 2010-11 |   |   |   | 2012-13 |   |   | Beyond |   |
| Contractual      obligations:                                 |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      debt (1)                                       |   | $                           | 105,728 |   |   | $ | 9,288 |   |   | $ | 20,000 |   |   | $ | 76,440 |   |   | $ | - |   |
| Interest      expense (2)                                     |   |                        | 17,116  |   |   |   | 6,585 |   |   |   | 9,356 |   |   |   | 1,175 |   |   |   | - |   |
| Operating      leases                                         |   |                        | 3,535   |   |   |   | 735 |   |   |   | 1,006 |   |   |   | 616 |   |   |   | 1,178 |   |
| Purchase      obligations for materials      and services (3) |   |                        | 2,451   |   |   |   | 2,252 |   |   |   | 199 |   |   |   | - |   |   |   | - |   |
| Sears      Agreement settlement fees (4)                      |   |                        | 2,400   |   |   |   | 1,650 |   |   |   | 300 |   |   |   | 300 |   |   |   | 150 |   |
| Other      liabilities (5)                                    |   |                        | 1,383   |   |   |   | 1,315 |   |   |   | 44 |   |   |   | 12 |   |   |   | 12 |   |
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                                                         |   | $                           | 132,613 |   |   | $ | 21,825 |   |   | $ | 30,905 |   |   | $ | 78,543 |   |   | $ | 1,340 |   |
|                                                          |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                     |   | AMOUNT      OF COMMITMENT EXPIRATION PER PERIOD |   |
|---------------------------------------|--------|-------------------------------------------------|--------|
|                                  |   |                                            |   |   |   |   |   |   |   |   |   |   |   | 2014      & |   |
|                                  |   | Total                                           |   |   | 2009 |   |   |   | 2010-11 |   |   |   | 2012-13 |   |   | Beyond |   |
| Other      commitments:               |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Standby      letters of credit (6)    |   | $                                               | 20,552 |   |   | $ | 20,552 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Contingent      lease obligations (7) |   |                                            | 730    |   |   |   | 280 |   |   |   | 120 |   |   |   | 268 |   |   |   | 62 |   |
|                                  |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                                 |   | $                                               | 21,282 |   |   | $ | 20,832 |   |   | $ | 120 |   |   | $ | 268 |   |   | $ | 62 |   |
|                                  |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)    |   | The      long-term debt agreement includes mandatory prepayments based on the      Company’s levels of cash flow and certain transactions; these amounts for      future years are not incorporated since they are not currently      estimable.  The future payments incorporate the revised      principal repayments under the Credit Agreement amendment, effective April      16, 2009.  The Company, in connection with it Credit Agreement, plans      to use the cash proceeds, if any, from the sale of certain properties, as      described more fully in Note 7 to the Notes to Consolidated Financial      Statements, to pay down its long-term debt.                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    |   | Amounts      represent the expected cash payments of the Company’s interest expense on      its long-term debt, calculated based on the rates included in the Credit      Agreement amendment, effective April 16, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3)    |   | Amount      represents outstanding purchase commitments at February 7,      2009.  The purchase commitments relate principally to      photographic paper, manufacturing supplies, telecommunication services,      database maintenance contracts and marketing  initiatives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4)    |   | The      Company is obligated to remit to Sears additional payments as stipulated      in the settlement of the previous license agreement.  A $1.5      million payment is due to Sears on April 30, 2009, with an additional      $150,000 due on December 31 in each six successive years.  These      amounts were recorded in other charges and impairments in      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (5)    |   | Amounts      consist primarily of accruals for severance and related costs, which are      recorded at the contractual amounts due.  The      Company expects to make a contribution of approximately $2.4 million to      the pension plan in 2009.  The Critical Accounting Estimates      section and Note 14 to the Consolidated Financial Statements included      elsewhere in this Annual Report on Form-10-K, provide a more complete      description of the status of the Company’s pensionplan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (6)    |   | The      Company primarily uses standby letters of credit to collateralize its      various large deductible insurance programs.  The letters of      credit generally have a one-year maturity and have auto renewal      clauses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7)    |   | In      July 2001, the Company announced the completion of the sale of its Wall      Décor segment, Prints Plus, which included the ongoing guarantee of      certain operating real estate leases of Prints Plus.  As of      February 7, 2009, the maximum future obligation to the Company under its      guarantee of remaining leases is approximately $1.0 million before      consideration of replacement tenant income.  To recognize the      risk associated with these leases based upon the Company’s past experience      with renegotiating lease obligations and management’s evaluation of      remaining leases, all of which is more fully described in Note 16 to the      Consolidated Financial Statements, the Company has recorded lease      obligation reserves totaling approximately $730,000 at February 7, 2009.      Based on the status of remaining leases, the Company believes that the      $730,000 reserve is adequate to cover the potential losses to be realized      under the Company’s operating lease guarantees.  |

| Item 7A. |         Quantitative and Qualitative Disclosure About Market  Risk |
|----------|------------------------------------------------------------------------------|

|  Notional      amount        |   |  $57,500,000             |
|-----------------------------------|--------|-------------------------------|
|  Fixed rate      paid        |   |  4.97%                   |
|  Variable rate      received |   |  3.25%                   |
|  Effective      date         |   |  September 19,      2007 |
|  Expiration      date        |   |  September 17,      2010 |

| Item 8. | Financial      Statements and Supplementary Data |
|---------|--------------------------------------------------|

| (a)    | FINANCIAL      STATEMENTS |                                                                                         | PAGES                                                                                        |
|--------|---------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|   |                      |                                                                                         |
|   | -                         |                                                                                         | Report      of Independent Registered Public Accounting Firm                                 |   | 30 |
|   | -                         |                                                                                         | Consolidated      Balance Sheets as of February 7, 2009 and February 2, 2008                 |   | 31-32 |
|   | -                         |                                                                                         | Consolidated      Statements of Operations for the fiscal years ended                        |   |   |
|   |                      | February      7, 2009, February 2, 2008 and February 3, 2007                                 |                                                                                         | 33 |
|   | -                         |                                                                                         | Consolidated      Statements of Changes in Stockholders' Equity                              |   |   |
|   |                      | for      the fiscal years ended February 7, 2009, February 2, 2008 and February 3,      2007 |                                                                                         | 34 |
|   | -                         |                                                                                         | Consolidated      Statements of Cash Flows for the fiscal years ended February 7,      2009, |   |   |
|   |                      | February      2, 2008 and February 3, 2007                                                   |                                                                                         | 35-37 |
|   | -                         |                                                                                         | Notes      to Consolidated Financial Statements                                              |   | 38-70 |

| in      thousands                                                                                                              |   | February      7, 2009 |    |   | February      2, 2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|--------|-----------------------|--------|
|                                                                                                                           |   |                  |    |   |                  |   |
| ASSETS                                                                                                                         |   |                  |    |   |                  |   |
| Current      assets:                                                                                                           |   |                  |    |   |                  |   |
| Cash      and cash equivalents                                                                                                 |   | $                     | 23,665  |   |                  | $      | 59,177 |   |
| Accounts      receivable:                                                                                                      |   |                  |    |   |                  |   |   |   |
| Trade                                                                                                                          |   |                  | 6,050   |   |                  |   | 7,469 |   |
| Other                                                                                                                          |   |                  | 923     |   |                  |   | 4,030 |   |
| Inventories                                                                                                                    |   |                  | 8,489   |   |                  |   | 14,296 |   |
| Prepaid      expenses and other current assets                                                                                 |   |                  | 5,800   |   |                  |   | 5,174 |   |
| Refundable      income taxes                                                                                                   |   |                  | 357     |   |                  |   | - |   |
| Deferred      tax assets                                                                                                       |   |                  | 9,581   |   |                  |   | 2,673 |   |
| Assets      held for sale                                                                                                      |   |                  | 6,615   |   |                  |   | 16 |   |
|                                                                                                                           |   |                  |    |   |                  |   |   |   |
| Total      current assets                                                                                                      |   |                  | 61,480  |   |                  |   | 92,835 |   |
|                                                                                                                           |   |                  |    |   |                  |   |   |   |
| Property      and equipment:                                                                                                   |   |                  |    |   |                  |   |   |   |
| Land                                                                                                                           |   |                  | 3,249   |   |                  |   | 5,065 |   |
| Building      and building improvements                                                                                        |   |                  | 32,377  |   |                  |   | 34,666 |   |
| Leasehold      improvements                                                                                                    |   |                  | 4,406   |   |                  |   | 5,426 |   |
| Photographic,      sales and manufacturing equipment                                                                           |   |                  | 178,732 |   |                  |   | 166,404 |   |
| Total                                                                                                                          |   |                  | 218,764 |   |                  |   | 211,561 |   |
| Less      accumulated depreciation and amortization                                                                            |   |                  | 167,877 |   |                  |   | 155,281 |   |
|  Property      and equipment, net                                                                                         |   |                  | 50,887  |   |                  |   | 56,280 |   |
| Other      investments - supplemental retirement plan                                                                          |   |                  | 975     |   |                  |   | 3,508 |   |
| Goodwill                                                                                                                       |   |                  | 21,459  |   |                  |   | 18,049 |   |
| Intangible      assets, net                                                                                                    |   |                  | 40,206  |   |                  |   | 44,907 |   |
| Deferred      tax assets                                                                                                       |   |                  | 8,359   |   |                  |   | 14,439 |   |
| Other      assets                                                                                                              |   |                  | 7,227   |   |                  |   | 6,499 |   |
|                                                                                                                           |   |                  |    |   |                  |   |   |   |
|                         TOTAL ASSETS |   | $                     | 190,593 |   |                  | $      | 236,517 |   |
|                                                                                                                           |   |                  |    |   |                  |   |   |   |

| in      thousands, except share and per share data                                                  |   | February      7, 2009 |     |   | February      2, 2008 |   |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------|--------|
|                                                                                                |   |                  |     |   |                  |   |
| LIABILITIES                                                                                         |   |                  |     |   |                  |   |
| Current      liabilities:                                                                           |   |                  |     |   |                  |   |
| Current      maturities of long-term debt                                                           |   | $                     | 1,150    |   |                  | $      | 8,697 |   |
| Accounts      payable                                                                               |   |                  | 6,816    |   |                  |   | 14,369 |   |
| Accrued      employment costs                                                                       |   |                  | 10,146   |   |                  |   | 10,330 |   |
| Customer      deposit liability                                                                     |   |                  | 12,503   |   |                  |   | 21,255 |   |
| Income      taxes payable                                                                           |   |                  | -        |   |                  |   | 387 |   |
| Sales      taxes payable                                                                            |   |                  | 5,284    |   |                  |   | 4,884 |   |
| Accrued      advertising expenses                                                                   |   |                  | 978      |   |                  |   | 1,266 |   |
| Accrued      expenses and other liabilities                                                         |   |                  | 18,133   |   |                  |   | 21,863 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| Total      current liabilities                                                                      |   |                  | 55,010   |   |                  |   | 83,051 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| Long-term      debt, less current maturities                                                        |   |                  | 102,316  |   |                  |   | 103,022 |   |
| Accrued      pension plan obligations                                                               |   |                  | 10,591   |   |                  |   | 10,490 |   |
| Supplemental      retirement plan obligations                                                       |   |                  | 1,112    |   |                  |   | 3,437 |   |
| Other      liabilities                                                                              |   |                  | 20,729   |   |                  |   | 19,543 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| Total      liabilities                                                                              |   |                  | 189,758  |   |                  |   | 219,543 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| 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, $.40 par value, 50,000,000 shares authorized; 17,089,788 and      17,028,315     |   |                  |     |   |                  |   |   |   |
| shares      outstanding at February 7, 2009, and February 2, 2008,      respectively                |   |                  | 6,836    |   |                  |   | 6,811 |   |
| Additional      paid-in capital                                                                     |   |                  | 28,502   |   |                  |   | 27,872 |   |
| Retained      earnings                                                                              |   |                  | 210,615  |   |                  |   | 222,435 |   |
| Accumulated      other comprehensive loss                                                           |   |                  | (13,114  | )      |                  |   | (6,725 | ) |
|                                                                                                |   |                  | 232,839  |   |                  |   | 250,393 |   |
| Treasury      stock - at cost, 10,270,319 and  10,619,728 shares      at                  |   |                  |     |   |                  |   |   |   |
| February      7, 2009, and February 2, 2008, respectively                                           |   |                  | (232,004 | )      |                  |   | (233,419 | ) |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| Total      stockholders' equity                                                                     |   |                  | 835      |   |                  |   | 16,974 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY                                                     |   | $                     | 190,593  |   |                  | $      | 236,517 |   |
|                                                                                                |   |                  |     |   |                  |   |   |   |

| in      thousands, except share and per share data                                            |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                                          |   |   |      |   |   |   |      |   |   |
| Net      sales                                                                                |   | $      | 462,548   |   |   | $      | 423,429   |   |   | $ | 292,973 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Cost      and expenses:                                                                       |   |   |      |   |   |   |      |   |   |   |   |   |
|         Cost of sales (exclusive of depreciation and amortization shown      below) |   |   | 41,218    |   |   |   | 45,284    |   |   |   | 28,582 |   |
|         Selling, general and administrative expenses                                |   |   | 379,372   |   |   |   | 328,419   |   |   |   | 219,911 |   |
|         Depreciation and amortization                                               |   |   | 29,432    |   |   |   | 27,291    |   |   |   | 16,861 |   |
|         Other charges and impairments                                               |   |   | 13,557    |   |   |   | 7,695     |   |   |   | 1,241 |   |
|                                                                                          |   |   | 463,579   |   |   |   | 408,689   |   |   |   | 266,595 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| (Loss)      income from continuing operations                                                 |   |   | (1,031    | )      |   |   | 14,740    |   |   |   | 26,378 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Interest      expense                                                                         |   |   | 9,147     |   |   |   | 10,652    |   |   |   | 2,380 |   |
| Interest      income                                                                          |   |   | 620       |   |   |   | 1,834     |   |   |   | 565 |   |
| Recovery      of preferred security interest                                                  |   |   | -         |   |   |   | -         |   |   |   | 887 |   |
| Other      income, net                                                                        |   |   | 190       |   |   |   | 175       |   |   |   | 144 |   |
| (Loss)      income from continuing operations before income tax (benefit)      expense        |   |   | (9,368    | )      |   |   | 6,097     |   |   |   | 25,594 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Income      tax (benefit) expense                                                             |   |   | (2,644    | )      |   |   | 2,080     |   |   |   | 9,164 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      (loss) income from continuing operations                                             |   |   | (6,724    | )      |   |   | 4,017     |   |   |   | 16,430 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      loss from discontinued operations, net of income tax    benefit                      |   |   | (961      | )      |   |   | (441      | )      |   |   | (103 | ) |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| NET      (LOSS) INCOME                                                                        |   | $      | (7,685    | )      |   | $      | 3,576     |   |   | $ | 16,327 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| NET      (LOSS) INCOME PER COMMON SHARE                                                       |   |   |      |   |   |   |      |   |   |   |   |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      (loss) income per share from continuing operations -    diluted                      |   | $      | (1.03     | )      |   | $      | 0.63      |   |   | $ | 2.58 |   |
| Net      loss per share from discontinued operations - diluted                                |   |   | (0.15     | )      |   |   | (0.07     | )      |   |   | (0.02 | ) |
| Net      (loss) income per share - diluted                                                    |   | $      | (1.18     | )      |   | $      | 0.56      |   |   | $ | 2.56 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      (loss) income per share from continuing operations - basic                           |   | $      | (1.03     | )      |   | $      | 0.63      |   |   | $ | 2.59 |   |
| Net      loss per share from discontinued operations - basic                                  |   |   | (0.15     | )      |   |   | (0.07     | )      |   |   | (0.02 | ) |
| Net      (loss) income per share - basic                                                      |   | $      | (1.18     | )      |   | $      | 0.56      |   |   | $ | 2.57 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Dividends      per share                                                                      |   | $      | 0.64      |   |   | $      | 0.64      |   |   | $ | 0.64 |   |
|                                                                                          |   |   |      |   |   |   |      |   |   |   |   |   |
| Weighted      average number of common and common equivalent                                  |   |   |      |   |   |   |      |   |   |   |   |   |
|         shares outstanding-diluted                                                  |   |   | 6,509,840 |   |   |   | 6,415,706 |   |   |   | 6,375,709 |   |
| Weighted      average number of common and common equivalent                                  |   |   |      |   |   |   |      |   |   |   |   |   |
|         shares outstanding-basic                                                    |   |   | 6,509,840 |   |   |   | 6,390,961 |   |   |   | 6,352,975 |   |

| in      thousands, except share and per share data                      |   |   |   |   |       |   |    |     |   |   | Accumulated        |   |   |         |    |   | Deferred            |   |     |   |   |
|-------------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|---------|----------|--------|--------|--------------------|--------|--------|--------------|---------|--------|---------------------|--------|----------|--------|--------|
|                                                                    |   |   |   |   | Additional |   |    |     |   |   | other              |   |   | Treasury     |    |   | compensation      - |   |     |   |   |
|                                                                    |   | Common |   |   | paid-in    |   |    | Retained |   |   | comprehensive      |   |   | stock,       |    |   | restricted          |   |     |   |   |
|                                                                    |   | stock  |   |   | capital    |   |    | earnings |   |   | income      (loss) |   |   | at      cost |    |   | stock               |   |     | Total  |   |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |
| Balance      at February 4, 2006                                        |   | $      | 7,428  |   |       | $      | 55,588  |     |   | $      | 210,666            |   |   | $            | (11,171 | )      |                | $      | (233,541 | )      |   | $ | (377 | ) |   | $ | 28,593 |   |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Net      income                                                         |   |   | -      |   |       |   | -       |     |   |   | 16,327             |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 16,327 |   |
| Total      other comprehensive income, net of tax effect                |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | 2,128   |   |                |   | -        |   |   |   | - |   |   |   | 2,128 |   |
| Total      comprehensive income                                         |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 18,455 |   |
| Adoption      of SFAS 158, net of tax                                   |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | (344    | )      |                |   | -        |   |   |   | - |   |   |   | (344 | ) |
| Surrender      of employee shares to satisfy personal                   |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| tax      liabilities upon vesting of formerly restricted shares         |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | (97      | )      |   |   | - |   |   |   | (97 | ) |
| Reclassification      of deferred compensation account                  |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| upon      adoption of SFAS 123R                                         |   |   | -      |   |       |   | (377    | )        |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | 377 |   |   |   | - |   |
| Purchase      of treasury stock                                         |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   | (32,538  | )      |   |   | - |   |   |   | (32,538 | ) |
| Retirement      of 1,658,607 common shares acquired                     |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| through      Dutch Auction self-tender offer                            |   |   | (663   | )      |       |   | (31,875 | )        |   |   | -                  |   |   |         | -       |   |                |   | 32,538   |   |   |   | - |   |   |   | - |   |
| Issuance      of common stock to employee benefit                       |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| plans,      restricted stock awards, option exercises                   |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| and      option modification (90,414 shares)                            |   |   | 25     |   |       |   | 494     |     |   |   | -                  |   |   |         | -       |   |                |   | 581      |   |   |   | - |   |   |   | 1,100 |   |
| Stock-based      compensation recognized                                |   |   | -      |   |       |   | 776     |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 776 |   |
| Excess      tax benefit related to stock-based compensation             |   |   | -      |   |       |   | 904     |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 904 |   |
| Dividends      ($0.64 per common share)                                 |   |   | -      |   |       |   | -       |     |   |   | (4,050             | )      |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (4,050 | ) |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Balance      at February 3, 2007                                        |   | $      | 6,790  |   |       | $      | 25,510  |     |   | $      | 222,943            |   |   | $            | (9,387  | )      |                | $      | (233,057 | )      |   | $ | - |   |   | $ | 12,799 |   |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Net      income                                                         |   |   | -      |   |       |   | -       |     |   |   | 3,576              |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 3,576 |   |
| Total      other comprehensive income, net of tax effect                |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | 2,662   |   |                |   | -        |   |   |   | - |   |   |   | 2,662 |   |
| Total      comprehensive income                                         |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 6,238 |   |
| Surrender      of employee shares to satisfy personal                   |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| tax      liabilities upon vesting of formerly restricted shares         |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | (551     | )      |   |   | - |   |   |   | (551 | ) |
| Issuance      of common stock to employee benefit plans                 |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| and      restricted stock awards (61,606 shares)                        |   |   | 21     |   |       |   | 237     |     |   |   | -                  |   |   |         | -       |   |                |   | 189      |   |   |   | - |   |   |   | 447 |   |
| Stock-based      compensation recognized                                |   |   | -      |   |       |   | 2,724   |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | 2,724 |   |
| Decreased      tax benefit related to stock-based compensation          |   |   | -      |   |       |   | (599    | )        |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (599 | ) |
| Dividends      ($0.64 per common share)                                 |   |   | -      |   |       |   | -       |     |   |   | (4,084             | )      |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (4,084 | ) |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Balance      at February 2, 2008                                        |   | $      | 6,811  |   |       | $      | 27,872  |     |   | $      | 222,435            |   |   | $            | (6,725  | )      |                | $      | (233,419 | )      |   | $ | - |   |   | $ | 16,974 |   |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Net      loss                                                           |   |   | -      |   |       |   | -       |     |   |   | (7,685             | )      |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (7,685 | ) |
| Total      other comprehensive loss, net of tax effect                  |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | (6,389  | )      |                |   | -        |   |   |   | - |   |   |   | (6,389 | ) |
| Total      comprehensive loss                                           |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (14,074 | ) |
| Surrender      of employee shares to satisfy personal                   |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| tax      liabilities upon vesting of formerly restricted shares         |   |   | -      |   |       |   | -       |     |   |   | -                  |   |   |         | -       |   |                |   | (175     | )      |   |   | - |   |   |   | (175 | ) |
| Issuance      of common stock, net of forfeitures (419,478 shares) |   |   | 25     |   |       |   | (229    | )   |   |   | -                  |   |   |         | -       |   |                |   | 1,590    |   |   |   | - |   |   |   | 1,386 |   |
| Stock-based      compensation recognized                                |   |   | -      |   |       |   | 1,037   |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   | 1,037 |   |
| Decreased      tax benefit related to stock-based compensation          |   |   | -      |   |       |   | (178    | )        |   |   | -                  |   |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (178 | ) |
| Dividends      ($0.64 per common share)                                 |   |   | -      |   |       |   | -       |     |   |   | (4,135             | )      |   |         | -       |   |                |   | -        |   |   |   | - |   |   |   | (4,135 | ) |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |
| Balance      at February 7, 2009                                        |   | $      | 6,836  |   |       | $      | 28,502  |     |   | $      | 210,615            |   |   | $            | (13,114 | )      |                | $      | (232,004 | )      |   | $ | - |   |   | $ | 835 |   |
|                                                                    |   |   |   |   |       |   |    |     |   |   |               |   |   |         |    |   |                |   |     |   |   |   |   |   |   |   |   |   |

| in      thousands                                                                                       |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                    |   |   |   |   |   |   |   |   |   |
| Reconciliation      of net (loss) income to cash flows provided by (used in) operating      activities: |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                                                                                  |   | $      | (7,685 | )      |   | $      | 3,576  |   |   | $ | 16,327 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments      for items not requiring (providing) cash:                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                      |   |   | 29,432 |   |   |   | 27,291 |   |   |   | 16,861 |   |
| Loss      from discontinued operations                                                                  |   |   | 961    |   |   |   | 441    |   |   |   | 103 |   |
| Stock-based      compensation expense                                                                   |   |   | 1,037  |   |   |   | 2,724  |   |   |   | 776 |   |
| Issuance      of common stock to Sears                                                                  |   |   | 865    |   |   |   | -      |   |   |   | - |   |
| Loss on impairment of property and equipment                                                            |   |   | 739    |   |   |   | -      |   |   |   | - |   |
| Loss      on disposition of property and equipment                                                      |   |   | 1,387  |   |   |   | 319    |   |   |   | 220 |   |
| Deferred      income tax provision                                                                      |   |   | (2,550 | )      |   |   | 1,455  |   |   |   | 9,357 |   |
| Pension,      supplemental retirement plan and profit sharing expense                                   |   |   | 505    |   |   |   | 2,009  |   |   |   | 2,337 |   |
| Lease      guarantee reserve reduction                                                                  |   |   | -      |   |   |   | -      |   |   |   | (887 | ) |
| Other                                                                                                   |   |   | 678    |   |   |   | 683    |   |   |   | 401 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash flow from operating assets and    liabilities:                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                |   |   | 4,523  |   |   |   | (1,987 | )      |   |   | 436 |   |
| Inventories                                                                                             |   |   | 5,448  |   |   |   | 2,000  |   |   |   | 81 |   |
| Prepaid      expenses and other current assets                                                          |   |   | (1,255 | )      |   |   | 550    |   |   |   | (636 | ) |
| Accounts      payable                                                                                   |   |   | (5,153 | )      |   |   | 6,020  |   |   |   | (555 | ) |
| Contribution      to pension plan                                                                       |   |   | (3,157 | )      |   |   | (5,050 | )      |   |   | - |   |
| Supplemental      retirement plan payments                                                              |   |   | (1,283 | )      |   |   | (249   | )      |   |   | (283 | ) |
| Accrued      expenses and other liabilities                                                             |   |   | (4,365 | )      |   |   | (5,833 | )      |   |   | (2,003 | ) |
| Income      taxes payable                                                                               |   |   | (708   | )      |   |   | (1,001 | )      |   |   | (373 | ) |
| Deferred      revenues and related costs                                                                |   |   | (7,720 | )      |   |   | 2,655  |   |   |   | (3,118 | ) |
| Other                                                                                                   |   |   | 964    |   |   |   | 4,269  |   |   |   | (1,051 | ) |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows provided by continuing operations                                                       |   |   | 12,663 |   |   |   | 39,872 |   |   |   | 37,993 |   |
| Cash      flows used in discontinued operations                                                         |   |   | (816   | )      |   |   | (406   | )      |   |   | (43 | ) |
| Cash      flows provided by operating activities                                                        |   |   | 11,847 |   |   |   | 39,466 |   |   |   | 37,950 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                                                                  |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                                               |   |   |    |   |   |   |    |   |   |
| Cash      flows provided by operating activities                                                   |   |   | 11,847  |   |   |   | 39,466  |   |   |   | 37,950 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      flows (used in) provided by financing activities:                                        |   |   |    |   |   |   |    |   |   |   |   |   |
|         Repayment of long-term obligations                                               |   |   | (8,697  | )      |   |   | (17,241 | )      |   |   | (8,333 | ) |
|         Proceeds from long-term borrowings                                               |   |   | -       |   |   |   | 115,000 |   |   |   | - |   |
|         Payment of debt issuance costs                                                   |   |   | -       |   |   |   | (2,737  | )      |   |   | - |   |
|         Restricted cash - release compensating balance under Credit      Agreement       |   |   | -       |   |   |   | 1,000   |   |   |   | - |   |
|         Purchase of treasury stock                                                       |   |   | -       |   |   |   | -       |   |   |   | (32,538 | ) |
|         Cash dividends                                                                   |   |   | (4,135  | )      |   |   | (4,084  | )      |   |   | (4,050 | ) |
|         Surrender of employee shares to satisfy personal tax liability upon      vesting |   |   |    |   |   |   |    |   |   |   |   |   |
|            of previously restricted stock                                 |   |   | (175    | )      |   |   | (551    | )      |   |   | (97 | ) |
|         Stock option exercises                                                           |   |   | -       |   |   |   | -       |   |   |   | 589 |   |
|         Tax (deficiency) benefit excess from stock-based    compensation                 |   |   | (178    | )      |   |   | (599    | )      |   |   | 904 |   |
|         Other                                                                            |   |   | (234    | )      |   |   | -       |   |   |   | (42 | ) |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
|         Cash flows (used in) provided by financing activities                            |   |   | (13,419 | )      |   |   | 90,788  |   |   |   | (43,567 | ) |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      flows (used in) provided by investing activities:                                        |   |   |    |   |   |   |    |   |   |   |   |   |
|         Acquisition of certain net assets of Portrait Corporation of America,      Inc., |   |   |    |   |   |   |    |   |   |   |   |   |
|            net of cash and cash equivalents acquired                      |   |   | (52     | )      |   |   | (83,010 | )      |   |   | - |   |
|         Additions to property and equipment                                              |   |   | (36,074 | )      |   |   | (14,884 | )      |   |   | (2,760 | ) |
|         Proceeds from Rabbi Trust used for supplemental retirement plan      payments    |   |   | 1,295   |   |   |   | 262     |   |   |   | 295 |   |
|         Distribution of Rabbi Trust funds in excess of related      obligations          |   |   | 1,311   |   |   |   | -       |   |   |   | - |   |
|         Other                                                                            |   |   | 32      |   |   |   | (21     | )      |   |   | 107 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
|         Cash flows used in investing activities                                          |   |   | (33,488 | )      |   |   | (97,653 | )      |   |   | (2,358 | ) |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Effect      of exchange rate changes on cash and cash equivalents                                  |   |   | (452    | )      |   |   | 282     |   |   |   | - |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      (decrease) increase in cash and cash equivalents                                          |   |   | (35,512 | )      |   |   | 32,883  |   |   |   | (7,975 | ) |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      and cash equivalents at beginning of year                                                |   |   | 59,177  |   |   |   | 26,294  |   |   |   | 34,269 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      and cash equivalents at end of year                                                      |   | $      | 23,665  |   |   | $      | 59,177  |   |   | $ | 26,294 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |

| in      thousands                                                                   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                |   |   |   |   |   |   |   |   |   |
| Supplemental      cash flow information:                                            |   |   |   |   |   |   |   |   |   |
| Interest      paid                                                                  |   | $      | 7,969  |   |   | $      | 6,509  |   |   | $ | 2,224 |   |
| Income      taxes paid, net                                                         |   | $      | 228    |   |   | $      | 2,082  |   |   | $ | 983 |   |
| Supplemental      non-cash financing activities:                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of treasury stock under the Employee Profit Sharing Plan              |   | $      | 521    |   |   | $      | 442    |   |   | $ | 440 |   |
| Issuance      of restricted stock and stock options to employees and      directors |   | $      | 876    |   |   | $      | 2,690  |   |   | $ | 785 |   |
| Issuance      of common stock to Sears                                              |   | $      | 865    |   |   | $      | -      |   |   | $ | - |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |

| Fiscal      year |   | Ended                 |   | Weeks |
|------------------|--------|-----------------------|--------|-------|
| 2008             |   | February      7, 2009 |   | 53    |
| 2007             |   | February      2, 2008 |   | 52    |
| 2006             |   | February      3, 2007 |   | 52    |

| Building      and building improvements              |   | 15      to 19 years |
|------------------------------------------------------|--------|---------------------|
| Leasehold      improvements                          |   | 5      to 15 years  |
| Photographic,      sales and manufacturing equipment |   | 2      to 7 years   |

| 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) |   | $                            | -      |   |   | $ | 3.5 |   |   | $ | - |   |   | $ | 3.5 |   |

| (1) |   | The      total fair value of the interest rate swap is included in Other      Liabilities as of February 7, 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.  The fair value of the interest rate swap at      February 7, 2009,  and February 2, 2008, was $3.5 million and      $2.9 million, respectively. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Current      assets                 |   | $      | 10,448  |   |
|-------------------------------------|--------|--------|---------|--------|
| Property      and equipment         |   |   | 34,986  |   |
| Goodwill                            |   |   | 21,227  |   |
| Intangibles                         |   |   | 46,779  |   |
| Other      assets                   |   |   | 6,762   |   |
|                                |   |   |    |   |
| Total      assets acquired          |   | $      | 120,202 |   |
|                                |   |   |    |   |
| Current      liabilities assumed    |   |   | (27,666 | )      |
| Long-term      liabilities assumed  |   |   | (8,606  | )      |
|                                |   |   |    |   |
| Total      allocated purchase price |   | $      | 83,930  |   |
|                                |   |   |    |   |

|                               |   | 2007   |    |   | 2006   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
|                               |   |   |    |   |   |   |
| Revenue                            |   | $      | 506,808 |   |   | $      | 577,408 |   |
|                               |   |   |    |   |   |   |   |   |
| Net      loss                      |   | $      | (18,124 | )      |   | $      | (24,593 | ) |
|                               |   |   |    |   |   |   |   |   |
| Basic      loss per common share   |   | $      | (2.84   | )      |   | $      | (3.87 | ) |
|                               |   |   |    |   |   |   |   |   |
| Diluted      loss per common share |   | $      | (2.84   | )      |   | $      | (3.87 | ) |

| in      thousands                          |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                       |   |   |   |   |   |   |   |   |   |
| Discontinued      operations:              |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |
| Net      Sales                             |   | $      | 463    |   |   | $      | 828    |   |   | $ | 830 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      loss                        |   | $      | 1,504  |   |   | $      | 570    |   |   | $ | 161 |   |
| Tax      benefit                           |   |   | 543    |   |   |   | 129    |   |   |   | 58 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss from discontinued operations |   | $      | 961    |   |   | $      | 441    |   |   | $ | 103 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                              |   | February      7, 2009 |   |   | February      2, 2008 |   |
|------------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                           |   |                  |   |   |                  |   |
| Raw      materials - film, paper and chemicals |   | $                     | 2,724  |   |                  | $      | 4,902 |   |
| Portraits      in process                      |   |                  | 1,313  |   |                  |   | 2,244 |   |
| Finished      portraits pending delivery       |   |                  | 261    |   |                  |   | 1,187 |   |
| Frames      and accessories                    |   |                  | 426    |   |                  |   | 634 |   |
| Studio      supplies                           |   |                  | 2,495  |   |                  |   | 3,636 |   |
| Equipment      repair parts and supplies       |   |                  | 878    |   |                  |   | 1,246 |   |
| Other                                          |   |                  | 392    |   |                  |   | 447 |   |
|                                           |   |                  |   |   |                  |   |   |   |
| Total                                          |   | $                     | 8,489  |   |                  | $      | 14,296 |   |
|                                           |   |                  |   |   |                  |   |   |   |

| Land                                     |   | $      | 1,473  |   |
|------------------------------------------|--------|--------|--------|--------|
| Buildings      and building improvements |   |   | 5,142  |   |
| Assets      held for sale                |   | $      | 6,615  |   |
|                                     |   |   |   |   |

|                                        |   | February      7, 2009 |   |   | February      2, 2008 |   |
|---------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                        |   |                  |   |   |                  |   |
| PCA      acquisition                        |   | $                     | 21,227 |   |                  | $      | 17,338 |   |
|                                        |   |                  |   |   |                  |   |   |   |
| Goodwill      from prior acquisitions       |   |                  | 512    |   |                  |   | 512 |   |
|                                        |   |                  |   |   |                  |   |   |   |
| Translation      impact on foreign balances |   |                  | (280   | )      |                  |   | 199 |   |
|                                        |   | $                     | 21,459 |   |                  | $      | 18,049 |   |
|                                        |   |                  |   |   |                  |   |   |   |

|                                        |   | 2008   |   |   | 2007   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance,      beginning of year             |   | $      | 18,049 |   |   | $      | 512 |   |
| Purchase      accounting entries            |   |   | 3,889  |   |   |   | 17,338 |   |
| Translation      impact on foreign balances |   |   | (479   | )      |   |   | 199 |   |
| Balance,      end of year                   |   | $      | 21,459 |   |   | $      | 18,049 |   |
|                                        |   |   |   |   |   |   |   |   |

|                         |   | 2007              |   |
|------------------------------|--------|-------------------|--------|
|                         |   |              |   |   |   |   |   | Translation |   |   |   |   |
|                         |   |              |   |   |   |   |   | Impact      of |   |   |   |   |
|                         |   |              |   |   | Accumulated |   |   | Foreign |   |   |   |   |
|                         |   | Gross      Amount |   |   | Amortization |   |   | Balances |   |   | Net      Balance |   |
|                         |   |              |   |   |   |   |   |   |   |   |   |   |
| Acquired      host agreement |   | $                 | 43,982 |   |   | $ | (1,359 | ) |   | $ | 646 |   |   | $ | 43,269 |   |
| Acquired      customer list  |   |              | 3,035  |   |   |   | (1,440 | ) |   |   | 43 |   |   |   | 1,638 |   |
|                         |   | $                 | 47,017 |   |   | $ | (2,799 | ) |   | $ | 689 |   |   | $ | 44,907 |   |
|                         |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                         |   |  2008        |   |
|------------------------------|--------|-------------------|--------|
|                         |   |              |   |   |   |   |   | Translation |   |   |   |   |
|                         |   |              |   |   |   |   |   | Impact      of |   |   |   |   |
|                         |   |              |   |   | Accumulated |   |   | Foreign |   |   |   |   |
|                         |   | Gross      Amount |   |   | Amortization |   |   | Balances |   |   | Net      Balance |   |
|                         |   |              |   |   |   |   |   |   |   |   |   |   |
| Acquired      host agreement |   | $                 | 43,269 |   |   | $ | (2,020 | ) |   | $ | (1,851 | ) |   | $ | 39,398 |   |
| Acquired      customer list  |   |              | 1,638  |   |   |   | (810 | ) |   |   | (20 | ) |   |   | 808 |   |
|                         |   | $                 | 44,907 |   |   | $ | (2,830 | ) |   | $ | (1,871 | ) |   | $ | 40,206 |   |
|                         |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 2009 | $2,421 |
|------|--------|
| 2010 | $2,224 |
| 2011 | $2,124 |
| 2012 | $2,072 |
| 2013 | $2,074 |

| in      thousands                                                    |   | February      7, 2009 |    |   | February      2, 2008 |   |
|----------------------------------------------------------------------|--------|-----------------------|---------|--------|-----------------------|--------|
|                                                                 |   |                  |    |   |                  |   |
| Term      loan portion of the Credit Agreement,                      |   |                  |    |   |                  |   |
|      net      of unamortized issuance costs |   | $                     | 103,466 |   |                  | $      | 111,719 |   |
| Less:      current maturities                                        |   |                  | 1,150   |   |                  |   | 8,697 |   |
|                                                                 |   | $                     | 102,316 |   |                  | $      | 103,022 |   |
|                                                                 |   |                  |    |   |                  |   |   |   |

| in      thousands               |   | 2008   |    |   | 2007   |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|
|                            |   |   |    |   |   |   |
| 2009                            |   | $      | 1,150   |   |   | $      | 1,150 |   |
| 2010                            |   |   | 1,150   |   |   |   | 1,150 |   |
| 2011                            |   |   | 1,150   |   |   |   | 1,150 |   |
| 2012                            |   |   | 102,278 |   |   |   | 102,278 |   |
|                            |   | $      | 105,728 |   |   | $      | 105,728 |   |
| Unamortized      issuance costs |   |   | 2,262   |   |   |   | 2,706 |   |
|                            |   | $      | 103,466 |   |   | $      | 103,022 |   |
|                            |   |   |    |   |   |   |   |   |

| in      thousands                                        |   | 2008   |    |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
|                                                     |   |   |    |   |   |   |   |   |   |
| Net      (loss) income                                   |   | $      | (7,685  | )      |   | $      | 3,576  |   |   | $ | 16,327 |   |
| Other      comprehensive (loss) income:                  |   |   |    |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustments            |   |   | (4,959  | )      |   |   | 2,510  |   |   |   | (264 | ) |
| Defined      benefit plans (1)                           |   |   | (1,430  | )      |   |   | 152    |   |   |   | 2,392 |   |
| Total      accumulated other comprehensive (loss) income |   |   | (6,389  | )      |   |   | 2,662  |   |   |   | 2,128 |   |
|                                                     |   |   |    |   |   |   |   |   |   |   |   |   |
| Total      comprehensive (loss) income                   |   | $      | (14,074 | )      |   | $      | 6,238  |   |   | $ | 18,455 |   |
|                                                     |   |   |    |   |   |   |   |   |   |   |   |   |

| in      thousands                                       |   | 2008   |    |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
|                                                    |   |   |    |   |   |   |   |   |   |
| Foreign      currency translation adjustments           |   | $      | (3,351  | )      |   | $      | 1,608  |   |   | $ | (902 | ) |
| Unfunded      projected benefit obligation, net of tax: |   |   |    |   |   |   |   |   |   |   |   |   |
| Prior      service cost                                 |   |   | -       |   |   |   | (131   | )      |   |   | (178 | ) |
| Unamortized      net actuarial losses                   |   |   | (9,763  | )      |   |   | (8,202 | )      |   |   | (8,307 | ) |
| Accumulated      other comprehensive loss               |   | $      | (13,114 | )      |   | $      | (6,725 | )      |   | $ | (9,387 | ) |
|                                                    |   |   |    |   |   |   |   |   |   |   |   |   |

| in      thousands                                                                             |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                          |   |   |   |   |   |   |   |   |   |
| Sears      fees related to settlement of the previous license agreement                       |   | $      | 7,527  |   |   | $      | 2,500  |   |   | $ | - |   |
| Other      transition related costs - PCA Acquisition                                         |   |   | 2,121  |   |   |   | 2,817  |   |   |   | - |   |
| Reserves      for severance and related costs                                                 |   |   | 2,046  |   |   |   | 2,035  |   |   |   | 878 |   |
| Impairment      charges                                                                       |   |   | 739    |   |   |   | 256    |   |   |   | 179 |   |
| Other                                                                                    |   |   | 1,124  |   |   |   | 87     |   |   |   | 184 |   |
|                                                                                          |   |   | 13,557 |   |   |   | 7,695  |   |   |   | 1,241 |   |
| Recorded      as a component of other (expense) income following income      from operations: |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Lease      guarantee reserve reduction                                                        |   |   | -      |   |   |   | -      |   |   |   | 887 |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Other Charges and Impairments                                                      |   | $      | 13,557 |   |   | $      | 7,695  |   |   | $ | 354 |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                                   |   |              |   |   |      |   |   | Asset       |   |   |     |   |   |              |    |
|---------------------------------------------------------------------|--------|-------------------|--------|--------|-----------|--------|--------|-------------|--------|--------|----------|--------|--------|-------------------|---------|
|                                                                |   | Reserve           |   |   | 2008      |   |   | Write-      |   |   |     |   |   | Reserve           |    |
|                                                                |   | Balance           |   |   | Charges   |   |   | Downs/      |   |   | Cash     |   |   | Balance           |    |
|                                                                |   | Feb.      2, 2008 |   |   | (Credits) |   |   | Impairments |   |   | Payments |   |   | Feb.      7, 2009 |    |
| Recorded      as a component of (loss) income from operations:      |   |              |   |   |      |   |   |        |   |   |     |   |   |              |    |
| Sears      fees related to settlement of previous license agreement |   | $                 | 2,500  |   |      | $      | 7,527  |        |   | $      | -        |   |   | $                 | (7,809  | ) |   | $ | 2,218 |   |
| Other      transition related costs - PCA Acquisition               |   |              | 472    |   |      |   | 2,121  |        |   |   | -        |   |   |              | (2,124  | ) |   |   | 469 |   |
| Reserves      for severance and related costs                       |   |              | 1,575  |   |      |   | 2,046  |        |   |   | -        |   |   |              | (2,437  | ) |   |   | 1,184 |   |
| Impairment      charges                                             |   |              | -      |   |      |   | 739    |        |   |   | (739     | )      |   |              | -       |   |   |   | - |   |
| Lease      guarantee reserve                                        |   |              | 744    |   |      |   | (14    | )           |   |   | -        |   |   |              | -       |   |   |   | 730 |   |
| Other                                                               |   |              | -      |   |      |   | 1,138  |        |   |   | -        |   |   |              | (1,061  | ) |   |   | 77 |   |
|                                                                |   |              |   |   |      |   |   |        |   |   |     |   |   |              |    |   |   |   |   |   |
| Total                                                               |   | $                 | 5,291  |   |      | $      | 13,557 |        |   | $      | (739     | )      |   | $                 | (13,431 | ) |   | $ | 4,678 |   |
|                                                                |   |              |   |   |      |   |   |        |   |   |     |   |   |              |    |   |   |   |   |   |

| in      thousands                                                   |   |              |   |   |      |   |   | Asset       |   |   |     |   |   |              |   |
|---------------------------------------------------------------------|--------|-------------------|--------|--------|-----------|--------|--------|-------------|--------|--------|----------|--------|--------|-------------------|--------|
|                                                                |   | Reserve           |   |   | 2007      |   |   | Write-      |   |   |     |   |   | Reserve           |   |
|                                                                |   | Balance           |   |   | Charges   |   |   | Downs/      |   |   | Cash     |   |   | Balance           |   |
|                                                                |   | Feb.      3, 2007 |   |   | (Credits) |   |   | Impairments |   |   | Payments |   |   | Feb.      2, 2008 |   |
| Recorded      as a component of income from operations:             |   |              |   |   |      |   |   |        |   |   |     |   |   |              |   |
| Sears      fees related to settlement of previous license agreement |   | $                 | -      |   |      | $      | 2,500  |        |   | $      | -        |   |   | $                 | -      |   |   | $ | 2,500 |   |
| Other      transition related costs - PCA Acquisition               |   |              | -      |   |      |   | 2,817  |        |   |   | -        |   |   |              | (2,345 | ) |   |   | 472 |   |
| Reserves      for severance and related costs                       |   |              | 449    |   |      |   | 2,035  |        |   |   | -        |   |   |              | (909   | ) |   |   | 1,575 |   |
| Impairment      charges                                             |   |              | -      |   |      |   | 256    |        |   |   | (256     | )      |   |              | -      |   |   |   | - |   |
| Lease      guarantee reserve                                        |   |              | 744    |   |      |   | -      |        |   |   | -        |   |   |              | -      |   |   |   | 744 |   |
| Other                                                               |   |              | -      |   |      |   | 87     |        |   |   | -        |   |   |              | (87    | ) |   |   | - |   |
|                                                                |   |              |   |   |      |   |   |        |   |   |     |   |   |              |   |   |   |   |   |   |
| Total                                                               |   | $                 | 1,193  |   |      | $      | 7,695  |        |   | $      | (256     | )      |   | $                 | (3,341 | ) |   | $ | 5,291 |   |
|                                                                |   |              |   |   |      |   |   |        |   |   |     |   |   |              |   |   |   |   |   |   |

|                          |               |   | Options      Outstanding and Exercisable |    |
|-------------------------------|--------------------|--------|------------------------------------------|---------|
|                          |               |   |                                     |    |   | Weighted-Average |   |   |   |   |   |   |   |   |   |   |
|                          |               |   | Number      of Shares               |    |   | Remaining      Contractual |   |   | Weighted-Average |   |   | Number      of Shares |   |   | Weighted      Average |   |
| Range      of Exercise Prices |               |   | Outstanding                              |    |   | Life      (Years) |   |   | Exercise      Price |   |   | Exercisable |   |   | Exercise      Price |   |
|                          |               |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
| $                             | 12.21      - 13.58 |   |                                     |    | 217,500 |   |   |   | 8.18 |   |   | $ | 13.04 |   |   |   | - |   |   | $ | - |   |
|                          |               |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |               |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                         |               |   |                                     | 217,500 |   |   |   | 8.18 |   |   | $ | 13.04 |   |   |   | - |   |   | $ | - |   |
|                          |               |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                         |   | 2008   |                |
|----------------------------------------------|--------|--------|---------------------|
| Expected      term until exercise (years)    |   |   | 3.45      - 8.09    |   |
| Expected      stock price volatility         |   |   | 41.97%      - 52.05 | % |
| Weighted-average      stock price volatility |   |   | 44.23               | % |
| Expected      dividends                      |   |   | 4.71%      - 5.24   | % |
| Risk-free      interest rate                 |   |   | 2.55      - 3.59    | % |
|                                         |   |   |                |   |

|                          |   | 2007        |   |   | 2006        |   |
|-------------------------------|--------|-------------|--------|--------|-------------|--------|
| Dividend      yield           |   |        | 3.4    | %      |        |   | 3.4 | % |
| Stock      volatility factor  |   |        | 37.0   | %      |        |   | 37.0 | % |
| Risk-free      interest rate  |   |        | 3.0    | %      |        |   | 3.0 | % |
| Expected      life of options |   | 1      year |   |   | 1      year |   |

|                              |   | 2008   |    |
|-----------------------------------|--------|--------|---------|
|                              |   |   |    |   | Weighted-Average |   |
|                              |   | Shares |    |   | Exercise      Price |   |
| Balance      at beginning of year |   |   | 35,046  |   |   | $ | 15.56 |   |
| Granted                           |   |   | -       |   |   |   |   |   |
| Cancelled      or expired         |   |   | (20,000 | ) |   |   | 16.50 |   |
| Exercised                         |   |   | -       |   |   |   |   |   |
|                              |   |   |    |   |   |   |   |   |
| End      of year balance          |   |   | 15,046  |   |   | $ | 14.30 |   |
|                              |   |   |    |   |   |   |   |   |
| Exercisable                       |   |   | 15,046  |   |   | $ | 14.30 |   |
|                              |   |   |    |   |   |   |   |   |

|                 |   |   | Options      Outstanding and Exercisable |   |
|----------------------|--------|--------|------------------------------------------|--------|
|                 |   |   |                                     |   |   | Weighted-Average |   |   |   |   |
|                 |   |   | Number      of Shares               |   |   | Remaining      Contractual |   |   | Weighted-Average |   |
| Exercise      Prices |   |   | Outstanding                              |   |   | Life      (Years) |   |   | Exercise      Price |   |
|                 |   |   |                                     |   |   |   |   |   |   |   |
| $                    | 12.96  |   |                                     |   | 10,046 |   |   |   | 1.70 |   |   | $ | 12.96 |   |
| $                    | 17.00  |   |                                     |   | 5,000 |   |   |   | 1.18 |   |   |   | 17.00 |   |
|                 |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Total                |   |   |                                     | 15,046 |   |   |   | 1.53 |   |   | $ | 14.30 |   |
|                 |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

|                                                                  |   | 2008   |    |   | 2007                                   |   |   | 2006   |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|----------------------------------------|--------|--------|--------|--------|
|                                                                  |   | Shares |    |   | Weighted-Average      Grant-Date Value |   |   | Shares |   |   | Weighted-Average      Grant-Date Value |   |   | Shares |   |   | Weighted-Average      Grant-Date Value |   |
| Nonvested      stock, beginning of year                               |   |   | 1,584   |   |                                   | $      | 18.95  |   |   |   | 4,448 |   |   | $ | 17.99 |   |   |   | 29,727 |   |   | $ | 17.20 |   |
| Granted                                                               |   |   | 57,082  |   |                                   |   | 15.76  |   |   |   | 53,250 |   |   |   | 50.52 |   |   |   | 44,207 |   |   |   | 17.75 |   |
| Vested                                                                |   |   | (53,811 | )      |                                   |   | 15.79  |   |   |   | (55,836 | ) |   |   | 48.81 |   |   |   | (52,223 | ) |   |   | 17.39 |   |
| Forfeited                                                             |   |   | (3,799  | )      |                                   |   | 15.80  |   |   |   | (278 | ) |   |   | 54.00 |   |   |   | (17,263 | ) |   |   | 17.83 |   |
| Nonvested      stock, end of year                                     |   |   | 1,056   |   |                                   | $      | 18.95  |   |   |   | 1,584 |   |   | $ | 18.95 |   |   |   | 4,448 |   |   | $ | 17.99 |   |
|                                                                  |   |   |    |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based      compensation expense related to nonvested stock |   | $      | 850,000 |   |                                   |   |   |   |   | $ | 2,724,000 |   |   |   |   |   |   | $ | 776,000 |   |   |   |   |   |
|                                                                  |   |   |    |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                             |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                          |   |   |   |   |   |   |   |   |   |
| Profit      sharing                                           |   | $      | 590    |   |   | $      | 526    |   |   | $ | 442 |   |
| Pension      plan expense                                     |   |   | 818    |   |   |   | 1,202  |   |   |   | 1,614 |   |
| Supplemental      retirement plan (income)  expense |   |   | (903   | )      |   |   | 281    |   |   |   | 281 |   |
| Total,      net                                               |   | $      | 505    |   |   | $      | 2,009  |   |   | $ | 2,337 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |

|                           |   | Target     |   |   | Plan      Assets at   |
|--------------------------------|--------|------------|--------|--------|-----------------------|
| Asset      Category            |   | Allocation |   |   | February      7, 2009 |
| Equity      securities         |   |       | 50     | %      |                  |   | 48 | % |
| Debt      securities           |   |       | 45     | %      |                  |   | 49 | % |
| Cash      and cash equivalents |   |       | 5      | %      |                  |   | 3 | % |
| Total                          |   |       | 100    | %      |                  |   | 100 | % |
|                           |   |       |   |   |                  |   |   |   |

|                   |   | Target     |   |   | Plan      Assets at    |   |
|------------------------|--------|------------|--------|--------|------------------------|--------|
| Asset      Category    |   | Allocation |   |   | December      31, 2007 |   |
| Equity      securities |   |       | 60     | %      |                   |   | 61 | % |
| Debt      securities   |   |       | 40     | %      |                   |   | 39 | % |
| Total                  |   |       | 100    | %      |                   |   | 100 | % |
|                   |   |       |   |   |                   |   |   |   |

| in      thousands |   | Pension      Plan |   |   | Supplemental      Retirement |   |
|-------------------|--------|-------------------|--------|--------|------------------------------|--------|
|              |   | Benefits          |   |   | Plan      Benefits           |   |
|              |   |              |   |   |                         |   |
| 2009              |   | $                 | 2,020  |   |                         | $      | 90 |   |
| 2010              |   |              | 2,040  |   |                         |   | 10 |   |
| 2011              |   |              | 2,200  |   |                         |   | 70 |   |
| 2012              |   |              | 2,300  |   |                         |   | 110 |   |
| 2013              |   |              | 2,370  |   |                         |   | 110 |   |
| 2014      - 2019  |   |              | 14,620 |   |                         |   | 590 |   |

|                                                              |   | Defined      Benefit Plans |    |
|-------------------------------------------------------------------|--------|----------------------------|---------|
|                                                              |   | Pension      Plan          |    |   | Supplemental      Retirement Plan |   |
| in      thousands                                                 |   | 2008                       |    |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |
| Projected      benefit obligation                                 |   |                       |    |   |   |   |   |   |   |   |   |   |
|          Benefit obligation at beginning of year   |   | $                          | 50,245  |   |   | $ | 51,836 |   |   | $ | 3,617 |   |   | $ | 3,702 |   |
|          Service cost                              |   |                       | 279     |   |   |   | 279 |   |   |   | 71 |   |   |   | 77 |   |
|          Interest cost                             |   |                       | 2,983   |   |   |   | 2,936 |   |   |   | 212 |   |   |   | 206 |   |
|          Actuarial gains                           |   |                       | (8,184  | ) |   |   | (1,494 | ) |   |   | (461 | ) |   |   | (118 | ) |
|          Benefit payments                          |   |                       | (2,168  | ) |   |   | (3,312 | ) |   |   | (1,322 | ) |   |   | (250 | ) |
|          Plan amendments (1)                       |   |                       | (292    | ) |   |   | - |   |   |   | (916 | ) |   |   | - |   |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Benefit obligation at end of year (2) (3) |   | $                          | 42,863  |   |   | $ | 50,245 |   |   | $ | 1,201 |   |   | $ | 3,617 |   |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets                                    |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Fair value at beginning of year           |   | $                          | 37,857  |   |   | $ | 35,472 |   |   | $ | - |   |   | $ | - |   |
|          Actual (loss) return on plan assets       |   |                       | (8,864  | ) |   |   | 647 |   |   |   | - |   |   |   | - |   |
|          Employer contributions (4)                |   |                       | 3,157   |   |   |   | 5,050 |   |   |   | 1,322 |   |   |   | 249 |   |
|          Benefit payments                          |   |                       | (2,168  | ) |   |   | (3,312 | ) |   |   | (1,322 | ) |   |   | (249 | ) |
|          Plan amendments (5)                       |   |                       | 270     |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Fair value at end of year                 |   | $                          | 30,252  |   |   | $ | 37,857 |   |   | $ | - |   |   | $ | - |   |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Funded      status                                                |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Funded status at end of year              |   | $                          | (12,611 | ) |   | $ | (12,388 | ) |   | $ | (1,201 | ) |   | $ | (3,617 | ) |
|          Unrecognized prior service cost           |   |                       | -       |   |   |   | 89 |   |   |   | - |   |   |   | 123 |   |
|          Unrecognized net loss (gain)              |   |                       | 16,445  |   |   |   | 13,859 |   |   |   | (725 | ) |   |   | (658 | ) |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net amount recognized                     |   | $                          | 3,834   |   |   | $ | 1,560 |   |   | $ | (1,926 | ) |   | $ | (4,152 | ) |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Components      of consolidated balance sheet                     |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Accrued benefit liability                 |   | $                          | (12,611 | ) |   | $ | (12,388 | ) |   | $ | (1,201 | ) |   | $ | (3,617 | ) |
|          Accumulated other comprehensive loss      |   |                       | 16,445  |   |   |   | 13,948 |   |   |   | (725 | ) |   |   | (535 | ) |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net amount recognized                     |   | $                          | 3,834   |   |   | $ | 1,560 |   |   | $ | (1,926 | ) |   | $ | (4,152 | ) |
|                                                              |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) |   | Plan      amendments for the pension plan include an adjustment of $272,000 in      expense due to the change in measurement date and curtailment income of      $564,000 related to the freeze of benefits for previously grandfathered      employees.  Plan amendments for the supplemental retirement plan      include $562,000 in curtailment income related to the lump-sum      settlement of benefits for two employees and a $354,000 gain related to      the lump-sum settlement payment to a third participant. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | At      February 7, 2009, and February 2, 2008, the accumulated benefit obligation      for the pension plan was $42.9 million and $49.6 million,      respectively.                                                                                                                                                                                                                                                                                                                                                                        |
| (3) |   | At      February 7, 2009, and February 2, 2008, the accumulated benefit obligation      for the supplemental retirement plan was $1.2 million and $3.5 million,      respectively.                                                                                                                                                                                                                                                                                                                                                          |
| (4) |   | For      the fiscal year ended February 2, 2008, contributions to the pension plan      included $771,000 that was contributed after the measurement date but      prior to year-end.  For the supplemental retirement plan for the      fiscal years ended February 7, 2009, and February 2, 2008, the employer      contributions were financed through the liquidation of investments in the      Company’s Rabbi Trust.                                                                                                 |
| (5) |   | Plan      amendment includes an adjustment of $270,000 in expense due to the change      in measurement date.                                                                                                                                                                                                                                                                                                                                                                                                                               |

|                                                                                                       |   |              |   |   | Supplemental         |   |   |   |   |
|------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|----------------------|--------|--------|--------|--------|
| in  thousands                                                                                    |   | Pension      Plan |   |   | Retirement      Plan |   |   | Total  |   |
|                                                                                                       |   |              |   |   |                 |   |   |   |   |
| Prior      Service Cost, net of tax:                                                                       |   |              |   |   |                 |   |   |   |   |
|          Unrealized losses on net prior service cost at February 3,      2007               |   | $                 | 83     |   |                 | $      | 95     |   |   | $ | 178 |   |
|          Recognition of net prior service cost in earnings                                  |   |              | (28    | )      |                 |   | (19    | )      |   |   | (47 | ) |
|          Unrealized losses on net prior service cost at February 2,      2008               |   |              | 55     |   |                 |   | 76     |   |   |   | 131 |   |
|          Recognition of net prior service cost in earnings                                  |   |              | (27    | )      |                 |   | (19    | )      |   |   | (46 | ) |
|          Recognition of curtailment benefit in earnings                                     |   |              | (28    | )      |                 |   | (57    | )      |   |   | (85 | ) |
|          Unrealized losses on net prior service cost at February 7,      2009               |   | $                 | -      |   |                 | $      | -      |   |   | $ | - |   |
|                                                                                                       |   |              |   |   |                 |   |   |   |   |   |   |   |
| Actuarial      (Gain) Loss, net of tax:                                                                    |   |              |   |   |                 |   |   |   |   |   |   |   |
|          Unrealized losses (gains) on net actuarial (gain)/loss at February 3,      2007    |   | $                 | 8,662  |   |                 | $      | (355   | )      |   | $ | 8,307 |   |
|          Net actuarial losses (gains) recorded in accumulated other comprehensive      loss |   |              | 485    |   |                 |   | (74    | )      |   |   | 411 |   |
|          Recognition of net actuarial (losses)/gains in earnings                            |   |              | (537   | )      |                 |   | 21     |   |   |   | (516 | ) |
|          Unrealized losses (gains) on net actuarial (gain)/loss at February 2,      2008    |   |              | 8,610  |   |                 |   | (408   | )      |   |   | 8,202 |   |
|          Net actuarial gains recorded in accumulated other comprehensive      loss          |   |              | 2,025  |   |                 |   | (854   | )      |   |   | 1,171 |   |
|          Recognition of net actuarial (losses)/gains in earnings                            |   |              | (439   | )      |                 |   | 37     |   |   |   | (402 | ) |
|          Recognition of settlement and curtailment benefit in    earnings                   |   |              | -      |   |                 |   | 775    |   |   |   | 775 |   |
|          Unrealized losses (gains) on net actuarial (gain)/loss at February 7,      2009    |   | $                 | 10,196 |   |                 | $      | (450   | )      |   | $ | 9,746 |   |
|                                                                                                       |   |              |   |   |                 |   |   |   |   |   |   |   |

| in      thousands                            |   | Pension      Plan |   |   | Supplemental      Retirement Plan |   |
|----------------------------------------------|--------|-------------------|--------|--------|-----------------------------------|--------|
|                                         |   | 2008              |   |   | 2007                              |   |   | 2006 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                         |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Components      of net periodic benefit cost |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                            |   | $                 | 279    |   |                              | $      | 279 |   |   | $ | 404 |   |   | $ | 71 |   |   | $ | 77 |   |   | $ | 75 |   |
| Interest      cost                           |   |              | 2,983  |   |                              |   | 2,936 |   |   |   | 2,869 |   |   |   | 212 |   |   |   | 206 |   |   |   | 200 |   |
| Expected      return on plan assets          |   |              | (3,242 | )      |                              |   | (2,924 | ) |   |   | (2,799 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization      of prior service cost      |   |              | 44     |   |                              |   | 44 |   |   |   | 44 |   |   |   | 31 |   |   |   | 31 |   |   |   | 31 |   |
| Amortization      of net loss (gain)         |   |              | 710    |   |                              |   | 867 |   |   |   | 1,096 |   |   |   | (59 | ) |   |   | (33 | ) |   |   | (25 | ) |
| Curtailment      expense (income)            |   |              | 44     |   |                              |   | - |   |   |   | - |   |   |   | (469 | ) |   |   | - |   |   |   | - |   |
| Net      gain due to settlements             |   |              | -      |   |                              |   | - |   |   |   | - |   |   |   | (689 | ) |   |   | - |   |   |   | - |   |
|                                         |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost               |   | $                 | 818    |   |                              | $      | 1,202 |   |   | $ | 1,614 |   |   | $ | (903 | ) |   | $ | 281 |   |   | $ | 281 |   |
|                                         |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                           |   | Pension      Plan |   |   | Supplemental      Retirement Plan |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-----------------------------------|--------|
|                                                                                                                           |   | 2008              |   |   | 2007                              |   |   | 2006 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                           |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average      assumptions used to determine benefit                obligations at fiscal year end: |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             Discount rate                                                                        |   | 7.25              | %      |   | 6.00                              | %      |   | 5.75 | % |   | 7.25 | % |   | 6.00 | % |   | 5.75 | % |
|             Rate of increase in future compensation                                              |   | 3.00              | %      |   | 3.00                              | %      |   | 3.00 | % |   | 2.00 | % |   | 2.00 | % |   | 2.00 | % |
| Weighted-average      assumptions used to determine net      periodic           benefit cost:              |   |              |   |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|             Discount rate                                                                        |   | 6.00              | %      |   | 5.75                              | %      |   | 5.50 | % |   | 6.00 | % |   | 5.75 | % |   | 5.50 | % |
|             Expected long-term return on plan assets                                             |   | 8.25              | %      |   | 8.25                              | %      |   | 8.25 | % |   | N/A |   |   | N/A |   |   | N/A |   |
|             Rate of increase in future compensation                                              |   | 3.00              | %      |   | 3.00                              | %      |   | 3.75 | % |   | 2.00 | % |   | 2.00 | % |   | 2.00 | % |

| in      thousands                   |   | Pension      Plan |   |   | Supplemental      Retirement Plan |   |
|-------------------------------------|--------|-------------------|--------|--------|-----------------------------------|--------|
|                                |   | 2008              |   |   | 2007                              |   |   | 2008 |   |   | 2007 |   |
|                                |   |              |   |   |                              |   |   |   |   |   |   |   |
| Projected      benefit obligation   |   | $                 | 42,863 |   |                              | $      | 50,245 |   |   | $ | 1,201 |   |   | $ | 3,617 |   |
| Accumulated      benefit obligation |   |              | 42,863 |   |                              |   | 49,647 |   |   |   | 1,201 |   |   |   | 3,520 |   |
| Fair      value of plan assets      |   |              | 30,252 |   |                              |   | 37,857 |   |   |   | - |   |   |   | - |   |

| in      thousands                                            |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                         |   |   |   |   |   |   |   |   |   |
| Total      income tax (benefit) provision:                   |   |   |   |   |   |   |   |   |   |
|          Continuing  operations     |   | $      | (2,644 | )      |   | $      | 2,080  |   |   | $ | 9,164 |   |
|          Discontinued operations              |   |   | (543   | )      |   |   | (129   | )      |   |   | (58 | ) |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|          Total income tax (benefit) provision |   | $      | (3,187 | )      |   | $      | 1,951  |   |   | $ | 9,106 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                          |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                       |   |   |   |   |   |   |   |   |   |
| Federal                                                    |   |   |   |   |   |   |   |   |   |
| Current                                                    |   | $      | (94    | )      |   | $      | (56    | )      |   | $ | (430 | ) |
| Deferred                                                   |   |   | (1,784 | )      |   |   | 254    |   |   |   | 8,411 |   |
| Federal      income tax                                    |   |   | (1,878 | )      |   |   | 198    |   |   |   | 7,981 |   |
| State                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                                                    |   |   | -      |   |   |   | 681    |   |   |   | 143 |   |
| Deferred                                                   |   |   | (314   | )      |   |   | (368   | )      |   |   | 813 |   |
| State      income tax                                      |   |   | (314   | )      |   |   | 313    |   |   |   | 956 |   |
| Foreign                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                                                    |   |   | -      |   |   |   | -      |   |   |   | 94 |   |
| Deferred                                                   |   |   | (452   | )      |   |   | 1,569  |   |   |   | 133 |   |
| Foreign      income tax                                    |   |   | (452   | )      |   |   | 1,569  |   |   |   | 227 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      income tax provision from continuing operations |   | $      | (2,644 | )      |   | $      | 2,080  |   |   | $ | 9,164 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                                                |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                             |   |   |   |   |   |   |   |   |   |
| Tax      at statutory rate (34%)                                                 |   | $      | (3,184 | )      |   | $      | 2,073  |   |   | $ | 8,702 |   |
| State      income tax, at statutory rate, net of federal      income tax benefit |   |   | (207   | )      |   |   | 244    |   |   |   | 632 |   |
| Tax      effect of:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses      not deductible                                                     |   |   | 370    |   |   |   | 249    |   |   |   | 184 |   |
| Tax      credits and exclusions                                                  |   |   | (798   | )      |   |   | (691   | )      |   |   | (244 | ) |
| Valuation      allowance                                                         |   |   | 726    |   |   |   | 457    |   |   |   | - |   |
| Foreign      taxes                                                               |   |   | 248    |   |   |   | 385    |   |   |   | 41 |   |
| Tax      settlements                                                             |   |   | 223    |   |   |   | (620   | )      |   |   | (151 | )  |
| US      tax benefit of foreign tax deduction                                     |   |   | (22    | )      |   |   | (17    | )      |   |   | - |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Applicable      income tax (benefit) expense                                     |   | $      | (2,644 | )      |   | $      | 2,080  |   |   | $ | 9,164 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |

| in      thousands                                                              |   | 2008   |   |   | 2007   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                           |   |   |   |   |   |   |
| Deferred      tax assets                                                       |   |   |   |   |   |   |
| Federal,      state and foreign operating and capital loss carryforwards       |   | $      | 11,263 |   |   | $      | 3,806 |   |
| Pension      and supplemental retirement plan benefits                         |   |   | 4,502  |   |   |   | 5,541 |   |
| Reserves,      principally due to accrual for financial reportingpurposes      |   |   | 4,241  |   |   |   | 3,047 |   |
| Federal,      state and foreign tax credit carryforwards                       |   |   | 3,578  |   |   |   | 3,735 |   |
| Interest      rate swap                                                        |   |   | 1,325  |   |   |   | 1,113 |   |
| Property      and equipment, principally due to differences in    depreciation |   |   | -      |   |   |   | 2,719 |   |
| Other                                                                          |   |   | -      |   |   |   | 268 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| Gross      deferred tax assets                                                 |   |   | 24,909 |   |   |   | 20,229 |   |
|                                                                           |   |   |   |   |   |   |   |   |
| Deferred      tax liabilities                                                  |   |   |   |   |   |   |   |   |
| Property      and equipment, principally due to differences in    depreciation |   |   | (2,221 | )      |   |   | - |   |
|                                                                           |   |   |   |   |   |   |   |   |
| Gross      deferred tax liabilities                                            |   |   | (2,221 | )      |   |   | - |   |
|                                                                           |   |   |   |   |   |   |   |   |
| Valuation      allowance                                                       |   |   | (4,748 | )      |   |   | (3,117 | ) |
|                                                                           |   |   |   |   |   |   |   |   |
| Net      deferred tax asset                                                    |   | $      | 17,940 |   |   | $      | 17,112 |   |
|                                                                           |   |   |   |   |   |   |   |   |

| 2009                        |   | $      | 735    |   |
|-----------------------------|--------|--------|--------|--------|
| 2010                        |   |   | 592    |   |
| 2011                        |   |   | 414    |   |
| 2012                        |   |   | 351    |   |
| 2013                        |   |   | 265    |   |
| Beyond                      |   |   | 1,178  |   |
| Total      minimum payments |   | $      | 3,535  |   |
|                        |   |   |   |   |

| 2009                        |   | $      | 240    |   |
|-----------------------------|--------|--------|--------|--------|
| 2010                        |   |   | 148    |   |
| 2011                        |   |   | 47     |   |
|                        |   |   |   |   |
| Total      minimum payments |   | $      | 435    |   |
|                        |   |   |   |   |

| 2009   |   | $      | 1,638  |   |
|--------|--------|--------|--------|--------|
| 2010   |   |   | 127    |   |
| 2011   |   |   | 117    |   |
| 2012   |   |   | 108    |   |
| 2013   |   |   | 99     |   |
| 2014   |   |   | 91     |   |
|   |   | $      | 2,180  |   |
|   |   |   |   |   |

| in      thousands, except share and per share data                     |   |            |    |
|------------------------------------------------------------------------|--------|-----------------|---------|
|                                                                   |   | April      26,  |    |   | July      19, |   |   | November      8, |   |   | February      7, |   |
| FISCAL      YEAR 2008                                                  |   | 2008            |    |   | 2008 |   |   | 2008 |   |   | 2009 |   |
|                                                                   |   | (12      weeks) |    |   | (12      weeks) |   |   | (16      weeks) |   |   | (13      weeks) |   |
| Net      sales                                                         |   | $               | 103,367 |   |   | $ | 89,562 |   |   | $ | 115,690 |   |   | $ | 153,929 |   |
| Gross      profit                                                      |   |            | 90,203  |   |   |   | 77,591 |   |   |   | 99,880 |   |   |   | 137,606 |   |
| Net      (loss) income from continuing operations                      |   |            | (92     | ) |   |   | (3,416 | ) |   |   | (13,057 | ) |   |   | 9,841 |   |
| Net      loss from discontinued operations                             |   |            | (164    | ) |   |   | (186 | ) |   |   | (284 | ) |   |   | (327 | ) |
| Net      (loss) income                                                 |   |            | (256    | ) |   |   | (3,602 | ) |   |   | (13,341 | ) |   |   | 9,514 |   |
| Net      (loss) income per share from continuing operations-diluted    |   | $               | (0.01   | ) |   | $ | (0.53 | ) |   | $ | (2.02 | ) |   | $ | 1.47 |   |
| Net      loss per share from discontinued operations- diluted          |   | $               | (0.03   | ) |   | $ | (0.03 | ) |   | $ | (0.04 | ) |   | $ | (0.05 | ) |
| Net      (loss) income per share - diluted                             |   | $               | (0.04   | ) |   | $ | (0.56 | ) |   | $ | (2.06 | ) |   | $ | 1.42 |   |
| Net      (loss) income per share from continuing operations- basic     |   | $               | (0.01   | ) |   | $ | (0.53 | ) |   | $ | (2.02 | ) |   | $ | 1.48 |   |
| Net      loss per share from discontinued operations- basic            |   | $               | (0.03   | ) |   | $ | (0.03 | ) |   | $ | (0.04 | ) |   | $ | (0.05 | ) |
| Net      (loss) income per share- basic                                |   | $               | (0.04   | ) |   | $ | (0.56 | ) |   | $ | (2.06 | ) |   | $ | 1.43 |   |
| Weighted      average number of common and equivalent shares - diluted |   |            | 6,450   |   |   |   | 6,468 |   |   |   | 6,479 |   |   |   | 6,682 |   |
| Weighted      average number of common and equivalent shares - basic   |   |            | 6,450   |   |   |   | 6,468 |   |   |   | 6,479 |   |   |   | 6,641 |   |

| in      thousands, except share and per share data                     |   |            |   |
|------------------------------------------------------------------------|--------|-----------------|--------|
|                                                                   |   | April      28,  |   |   | July      21, |   |   | November      10, |   |   | February      2, |   |
| FISCAL      YEAR 2007                                                  |   | 2007            |   |   | 2007 |   |   | 2007 |   |   | 2008 |   |
|                                                                   |   | (12      weeks) |   |   | (12      weeks) |   |   | (16      weeks) |   |   | (12      weeks) |   |
| Net      sales                                                         |   | $               | 57,654 |   |   | $ | 67,996 |   |   | $ | 135,205 |   |   | $ | 162,574 |   |
| Gross      profit                                                      |   |            | 49,257 |   |   |   | 57,460 |   |   |   | 114,815 |   |   |   | 143,864 |   |
| Net      income (loss) from continuing operations                      |   |            | 2,629  |   |   |   | (4,442 | ) |   |   | (9,969 | ) |   |   | 15,801 |   |
| Net      loss from discontinued operations                             |   |            | (74    | ) |   |   | (159 | ) |   |   | (138 | ) |   |   | (72 | ) |
| Net      income (loss)                                                 |   |            | 2,555  |   |   |   | (4,601 | ) |   |   | (10,107 | ) |   |   | 15,729 |   |
| Net      income (loss) per share from continuing operations-diluted    |   | $               | 0.41   |   |   | $ | (0.70 | ) |   | $ | (1.56 | ) |   | $ | 2.46 |   |
| Net      loss per share from discontinued operations- diluted          |   | $               | (0.01  | ) |   | $ | (0.02 | ) |   | $ | (0.02 | ) |   | $ | (0.01 | ) |
| Net      income (loss) per share - diluted                             |   | $               | 0.40   |   |   | $ | (0.72 | ) |   | $ | (1.58 | ) |   | $ | 2.45 |   |
| Net      income (loss) per share from continuing operations- basic     |   | $               | 0.41   |   |   | $ | (0.70 | ) |   | $ | (1.56 | ) |   | $ | 2.47 |   |
| Net      loss per share from discontinued operations- basic            |   | $               | (0.01  | ) |   | $ | (0.02 | ) |   | $ | (0.02 | ) |   | $ | (0.01 | ) |
| Net      income (loss) per share- basic                                |   | $               | 0.40   |   |   | $ | (0.72 | ) |   | $ | (1.58 | ) |   | $ | 2.46 |   |
| Weighted      average number of common and equivalent shares - diluted |   |            | 6,388  |   |   |   | 6,386 |   |   |   | 6,402 |   |   |   | 6,434 |   |
| Weighted      average number of common and equivalent shares - basic   |   |            | 6,363  |   |   |   | 6,386 |   |   |   | 6,402 |   |   |   | 6,409 |   |

| Item 9. | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosures |
|---------|-------------------------------------------------------------------------------------------------|

| Item 9A. |          Controls and Procedures |
|----------|-------------------------------------------------|

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

| b)   | Management’s      Assessment of Internal Control Over Financial  Reporting |
|----------------|----------------------------------------------------------------------------------|

| c)   | Remediation      of Prior Material Weaknesses |
|----------------|-----------------------------------------------|

| ·   | Effective      controls over tax depreciation amounts, which included the timely      resolution of reconciling items between the Company’s tax returns, the      Company’s tax depreciation records, and the calculations of deferred taxes      and income tax expense |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Management      monitoring controls to ensure those reconciliation controls are designed      and operating effectively |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | Policies      and procedures to ensure the fair value of the interest rate swap is      properly determined and recorded |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Management      monitoring controls to policies and procedures over determining and      recording of the interest rate swap is designed and operating      effectively |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Policies      and procedures to ensure the accrual for unpaid advertising costs is      properly determined and recorded |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Management      monitoring controls for policies and procedures over the determination and      recording of the advertising accrual to ensure controls are designed and      operating effectively |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| e)   | Report of Independent Registered Public Accounting      Firm |
|----------------|--------------------------------------------------------------|

| Item 9B. |         Other Information |
|----------|-------------------------------------|

| Item 10. |         Directors, Executive Officers and CorporateGovernance |
|----------|-------------------------------------------------------------------------|

| Item 11. |         Executive Compensation |
|----------|------------------------------------------|

| Item 12. |         Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters |
|----------|-----------------------------------------------------------------------------------------------------------------------|

|                                  |   |                                 |    |                   |   | Number      of securities         |   |   |
|---------------------------------------|--------|---------------------------------|---------|------------------------|--------|-----------------------------------|--------|--------|
|                                  |   |  Number      of securities |    |  Weighted-average |   | remaining      available          |   |   |
|                                  |   |  to      be issued upon    |    | exercise price         |   | for      future issuance under    |   |   |
|                                  |   | exercise      of outstanding    |    | of      outstanding    |   | equity      compensation          |   |   |
|                                  |   | option,      warrants           |    | options,      warrants |   | plans      (excluding securities  |   |   |
| Plan      Category                    |   | and      rights (a)             |    | and      rights (b)    |   | reflected      in column (a)) (c) |   |   |
| Equity      compensation plans        |   |                            |    |                   |   |                              |   |   |
| approved      by security holders (1) |   |                            | 232,546 |                   | $      | 13.13                             |   |   | 560,243 | (2) |   |
| Equity      compensation plans not    |   |                            |    |                   |   |                              |   |   |   |   |   |
| approved      by security holders (3) |   |                            | -       |                   |   | -                                 |   |   | 80,232 | (4) |   |
| Total                                 |   | $                               | 232,546 |                   | $      | 13.13                             |   |   | 640,475 |   |   |
|                                  |   |                            |    |                   |   |                              |   |   |   |   |   |

| (1) |   | Includes      15,046 stock options issued and outstanding under the Company’s previous      amended and restated nonqualified stock option plan and 217,500 stock      options issued and outstanding under the Company’s current plan, effective      May 29, 2008.  See Note 13 for further discussion of the      Company’s stock based compensation plans. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Represents      total shares of common stock available for issuance pursuant to awards      under the Company’s Omnibus Incentive Plan, effective May 29,      2008.  See Note 13 for further discussion of this      plan.                                                                                                                                                |
| (3) |   | The      only plan not approved by security holders is the Company’s stock bonus      plan.  This plan was enacted in fiscal 1982 and is no longer      active.  The remaining awards granted under this plan vested in      fiscal 2003.                                                                                                                        |
| (4) |   | Represents      80,232 shares reserved for issuance under the Company’s inactive stock      bonus plan.                                                                                                                                                                                                                                                                              |

| Item 13. |         Certain Relationships and Related Transactions, and Director      Independence |
|----------|--------------------------------------------------------------------------------------------------|

| Item 14. |         Principal Accounting Fees and Services |
|----------|----------------------------------------------------------|

| Item 15. |         Exhibits and Financial StatementSchedules |
|----------|-------------------------------------------------------------|

| (a)   | CERTAIN      DOCUMENTS FILED AS PART OF FORM10-K |
|-----------------|--------------------------------------------------|

| (1.)   | FINANCIAL STATEMENTS |   | PAGES                                                                                                          |
|--------|----------------------|--------|----------------------------------------------------------------------------------------------------------------|
|   |                 |   |                                                                                                           |
|   | -                    |   | Report      of Independent Registered Public Accounting Firm                                                   |   | 30 |
|   | -                    |   | Consolidated      Balance Sheets as of February 7, 2009, and February 2,2008                                   |   | 31-32 |
|   | -                    |   | Consolidated      Statements of Operations for the fiscal years ended                                          |   |   |
|   |                 |   |               February 7, 2009, February 2, 2008, and February 3, 2007 |   | 33 |
|   | -                    |   | Consolidated      Statements of Changes in Stockholders' Equity for the    fiscal                              |   |   |
|   |                 |   |                                                                                                           | years      ended February 7, 2009, February 2, 2008, and February 3,    2007 |   | 34 |
|   | -                    |   | Consolidated      Statements of Cash Flows for the fiscal years ended                                          |   |   |
|   |                 |   |                                                                                                           | February      7, 2009, February 2, 2008, and February 3, 2007 |   | 35-37 |
|   | -                    |   | Notes      to Consolidated Financial Statements                                                                |   | 38-70 |

| (2.) | FINANCIAL      STATEMENT SCHEDULES Schedules to the consolidated financial statements      required by Regulation S-X are omitted since the required      informationis included in thefootnotes. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3.) | EXHIBITS      FILED UNDER ITEM 601 OF REGULATION S-K The exhibits to this Annual Report on      Form 10-K are listed on the accompanying index and are      incorporatedherein by reference or are filed as      part of this Annual Report on Form10-K. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | EXHIBIT INDEX |
|-----------------|---------------|

| EXHIBIT |   |                                                                                                                 |
|---------|--------|----------------------------------------------------------------------------------------------------------------------|
| NUMBER  |   | DESCRIPTION                                                                                                          |
|    |   |                                                                                                                 |
| (3.1)   |   | Articles      of Incorporation of the Company, incorporated by reference to CPI Corp.'s      Annual Report           |
|    |   | for      fiscal year 1989 on Form 10-K, Exhibit 3.1, filed April 30,      1990.                                      |
|    |   |                                                                                                                 |
| (3.2)   |   | Amended      and Restated By-laws of the Company,  effective November 24,      2008, and incorporated      |
|    |   | by      reference to CPI Corp.'s Form 8-K, Exhibit 3.1, filed December 1,      2008.                                 |
|    |   |                                                                                                                 |
| (4.1)   |   | Form      of Rights Agreement, dated as of March 13, 2000, between CPI Corp. and      Harris Trust and               |
|    |   | Savings      Bank, incorporated by reference to CPI Corp.'s Form 8-A, Exhibit 4.5,      dated March 14, 2000.        |
|    |   |                                                                                                                 |
| (4.2)   |   | First      Amendment to Form of Rights Agreement, dated September 5, 2007, by      and between                  |
|    |   | CPI      Corp. and Computershare Trust Company, N.A., incorporated by reference to      CPI Corp.'s                  |
|    |   | Form      8-K, Exhibit 4.1, filed September 6, 2007.                                                                 |
|    |   |                                                                                                                 |
| (4.3)   |   | Second      Amendment to Form of Rights Agreement, dated December 21, 2007, by      and between                 |
|    |   | CPI      Corp. and Computershare Trust Company, N.A., incorporated by reference to      CPI Corp.'s                  |
|    |   | Form      8-K, Exhibit 4.1, filed December 21, 2007.                                                                 |
|    |   |                                                                                                                 |
| (10.1)  |   | License      Agreement Sears, Roebuck De Puerto Rico, Inc. dated January 1, 1999,      incorporated by               |
|    |   | reference      to CPI Corp.'s Annual Report for fiscal year 1998 on Form 10-K, Exhibit      10.30,                   |
|    |   | filed      May 5, 1999.                                                                                              |
|    |   |                                                                                                                 |
| (10.2)  |   | Development      and License Agreement dated January 31, 2001, between Sears, Roebuck &      Co. and             |
|    |   | Consumer      Programs, Incorporated, incorporated by reference to CPI Corp.'s Annual      Report for                |
|    |   | fiscal      year 2000 on Form 10-K, Exhibit 10.15, filed May 30,  2001.                                              |
|    |   |                                                                                                                 |
| (10.3)  |   | Third      Amendment dated June 5, 2002, to Sears License Agreement, incorporated      by  reference to    |
|    |   | CPI      Corp.'s Form 10-Q, Exhibit 10.51, filed June 7, 2002.                                                       |
|    |   |                                                                                                                 |
| (10.4)  |   | Sixth      Amendment dated November 20, 2002, to Sears License Agreement,      incorporated by reference             |
|    |   | to      CPI Corp.'s Form 10-Q, Exhibit 10.54, filed December 11,    2002.                                            |
|    |   |                                                                                                                 |
| (10.5)  |   | Third      Amendment to Sears License Agreement (Off Mall) dated November 20, 2002,      incorporated by             |
|    |   | reference      to CPI Corp.'s Form 10-Q, Exhibit 10.55, filed December 11,      2002.                                |
|    |   |                                                                                                                 |
| (10.6)  |   | Fourth      Amendment to Sears License Agreement (Off Mall) dated November 20, 2002,      incorporated by            |
|    |   | reference      to CPI Corp.'s Form 10-Q, Exhibit 10.56, filed December 11,      2002.                                |
|    |   |                                                                                                                 |
| (10.7)  |   | Fifth      Amendment to Sears License Agreement (Off Mall) dated November 20, 2002,      incorporated by             |
|    |   | reference      to CPI Corp.'s Form 10-Q, Exhibit 10.57, filed December 11,      2002.                                |
|    |   |                                                                                                                 |
| (10.8)  |   | Sears      License Agreement dated January 1, 2003, by and between Sears, Canada,      Inc., Sears Roebuck & Co. |
|    |   | and      CPI Corp. incorporated, by reference to CPI Corp.'s Annual Report for      fiscal year 2002                 |
|    |   | on      Form 10-K, Exhibit 10.64, filed May 16, 2003.                                                                |
|    |   |                                                                                                                 |
| (10.9)  |   | Seventh      Amendment dated August 11, 2003, to Sears License Agreement, incorporated      by reference             |
|    |   | to      CPI Corp.'s Form 10-Q, Exhibit 10.69, filed August 27,    2003.                                              |
|    |   |                                                                                                                 |
| (10.10) |   | Eighth      Amendment dated September 1, 2003, to Sears License Agreement,      incorporated by reference to         |
|    |   | CPI      Corp.'s Form 10-Q, Exhibit 10.70, filed December 18,  2003.                                                 |
|    |   |                                                                                                                 |
| (10.11) |   | Fourth      Amendment dated June 5, 2002, to License Agreement by and between Sears,      Roebuck and Co.            |
|    |   | and      CPI Corp., incorporated by reference to CPI Corp.'s Annual Report for      fiscal year 2003                 |
|    |   | on      Form 10-K, Exhibit 10.74, filed April 22, 2004.                                                              |
|    |   |                                                                                                                 |
| (10.12) |   | Sixth      Amendment dated April 29, 2004, to License Agreement (Off      Mall)  by and between Sears,     |
|    |   | Roebuck      and Co. and CPI Corp., incorporated by reference to CPI Corp.'s Form      10-Q,                         |
|    |   | Exhibit      10.83, filed June 10,2004.                                                                              |

| EXHIBIT  |   |                                                                                                                  |
|----------|--------|-----------------------------------------------------------------------------------------------------------------------|
| NUMBER   |   | DESCRIPTION                                                                                                           |
|     |   |                                                                                                                  |
|     |   |                                                                                                                  |
| (10.13)* |   | Employment      Agreement dated February 6, 2000, by and between Jane E. Nelson and CPI      Corp.,                   |
|     |   | incorporated      by reference to CPI Corp.'s Annual Report for fiscal year 1999 on Form      10-K,                   |
|     |   | Exhibit      10.36, filed April 26, 2000.                                                                             |
|     |   |                                                                                                                  |
| (10.14)* |   | Employment      Agreement dated December 31, 2008, by and between Jane E. Nelson      and                             |
|     |   | CPI      Corp., incorporated by reference to CPI Corp.'s Form 8-K, Exhibit A within      Exhibit                      |
|     |   | 10.67,      filed January 7, 2009.                                                                                    |
|     |   |                                                                                                                  |
| (10.15)* |   | CPI      Corp. 1981 Stock Bonus Plan (As Amended and Restated effective February 3,      1991), incorporated by       |
|     |   | reference      to CPI Corp.'s Annual Report for fiscal year 1992 on Form 10-K, Exhibit      10.29, filed May 5, 1993. |
|     |   |                                                                                                                  |
| (10.16)* |   | First      Amendment to CPI Corp. 1981 Stock Bonus Plan (As Amended and Restated      effective                       |
|     |   | February      3, 1991) effective January 1, 1995, incorporated by reference to CPI      Corp.'s Annual                |
|     |   | Report      for fiscal year 2000 on  Form 10-K, Exhibit 10.30, filed May 3,      2001.                      |
|     |   |                                                                                                                  |
| (10.17)* |   | CPI      Corp. Deferred Compensation and Retirement Plan for Non-Management      Directors                            |
|     |   | (Amended      and Restated as of January 28, 2000), incorporated by reference to CPI      Corp.'s Annual              |
|     |   | Report      for fiscal year 2000 on Form  10-K, Exhibit 10.31, filed May 3,      2001.                      |
|     |   |                                                                                                                  |
| (10.18)* |   | Deferred      Compensation and Stock Appreciation Rights Plan (Amended and Restated as      of                        |
|     |   | June      6, 1996),  incorporated by reference to CPI Corp.'s Annual      Report for fiscal year 2000       |
|     |   | on      Form 10-K, Exhibit 10.32, filed May 3, 2001.                                                                  |
|     |   |                                                                                                                  |
| (10.19)* |   | CPI      Corp. Stock Option Plan (Amended and Restated effective as of December 16,      1997),                       |
|     |   | incorporated      by reference to CPI Corp.'s Annual Report for fiscal year  2000      on Form 10-K,        |
|     |   | Exhibit      10.34, filed May 3, 2001.                                                                                |
|     |   |                                                                                                                  |
| (10.20)* |   | CPI      Corp. Key Executive Deferred Compensation Plan (As Amended and Restated      June 6, 1996),                  |
|     |   | incorporated      by reference to CPI Corp.'s Annual Report for fiscal year 2000 on Form      10-K,                   |
|     |   | Exhibit      10.36, filed May 3, 2001.                                                                                |
|     |   |                                                                                                                  |
| (10.21)* |   | Employment      Agreement dated April 8, 2002, by and between Gary W. Douglass and CPI      Corp.,                    |
|     |   | incorporated      by reference to CPI Corp.'s Annual Report for fiscal year 2001 on Form      10-K,                   |
|     |   | Exhibit      10.50, filed May 1, 2002.                                                                                |
|     |   |                                                                                                                  |
| (10.22)* |   | Second      Amendment to Exhibit C dated April 10, 2008, to Employment Agreement dated      April 8, 2002,            |
|     |   | and      amended as of October 1, 2003, and July 3, 2007, by and between Gary W.      Douglass and CPI Corp.,         |
|     |   | filed      within this Form 10-K as Exhibit 10.22.                                                               |
|     |   |                                                                                                                  |
| (10.23)* |   | First      Amendment to CPI Corp. Deferred Compensation and Retirement Plan for      Non-Management                   |
|     |   | Directors      (As Amended and Restated as of January 28, 2002), incorporated by      reference to                    |
|     |   | CPI      Corp.'s Form 10-Q, Exhibit 10.52, filed June 7, 2002.                                                        |
|     |   |                                                                                                                  |
| (10.24)* |   | Employment      Agreement dated October 21, 2002, by and between Peggy J. Deal and CPI      Corp.,                    |
|     |   | incorporated      by reference to CPI Corp.'s Form 10-Q, Exhibit 10.58, filed December 11,      2002.                 |
|     |   |                                                                                                                  |
| (10.25)  |   | First      Amendment dated September 30, 2002, to CPI Corp. Retirement Plan and      Trust, incorporated by           |
|     |   | reference      to CPI Corp.'s Annual Report for fiscal year 2002 on Form 10-K, Exhibit      10.65,                    |
|     |   | filed      May 16, 2003.                                                                                              |
|     |   |                                                                                                                  |
| (10.26)  |   | Second      Amendment dated November 29, 2002, to CPI Corp. Retirement Plan and Trust,      incorporated by           |
|     |   | reference      to CPI Corp.'s Annual Report for fiscal year 2002 on Form 10-K, Exhibit      10.66,                    |
|     |   | filed      May 16, 2003.                                                                                              |
|     |   |                                                                                                                  |
| (10.27)  |   | Third      Amendment dated February 6, 2004, to CPI Corp. Retirement Plan and Trust,      incorporated by             |
|     |   | reference      to CPI Corp.'s Annual Report  for fiscal year 2003 on Form 10-K,      Exhibit 10.73,         |
|     |   | filed      April 21,2004.                                                                                             |

| EXHIBIT        |   |                                                                                                                      |
|----------------|--------|---------------------------------------------------------------------------------------------------------------------------|
| NUMBER         |   | DESCRIPTION                                                                                                               |
|           |   |                                                                                                                      |
| (10.28)*       |   | CPI      Corp. Restricted Stock Plan as Amended and Restated effective as of April      14, 2005,                         |
|           |   | incorporated      by reference to CPI Corp.'s Annual Report for fiscal year 2004 on Form      10-K,                       |
|           |   | Exhibit      10.86, filed April 21, 2005.                                                                                 |
|           |   |                                                                                                                      |
| (10.29)*       |   | CPI      Corp. Performance Plan adopted effective as of April 14, 2005,      incorporated by reference                    |
|           |   | to      CPI Corp.'s Annual Report for fiscal year 2004  on Form 10-K,      Exhibit 10.90, filed April 21, 2005. |
|           |   |                                                                                                                      |
| (10.30)*       |   | CPI      Corp. Non-Employee Directors Restricted Stock Policy Pursuant to the CPI      Corp.                              |
|           |   | Restricted      Stock Plan adopted by the Company April 14, 2005, incorporated by      reference                          |
|           |   | to      CPI Corp.'s Annual Report for fiscal year 2004 on Form 10-K, Exhibit      10.91, filed April 21, 2005.            |
|           |   |                                                                                                                      |
| (10.31)*       |   | CPI      Corp. Non-Employee Directors Restricted Stock Policy pursuant to the CPI      Corp. Omnibus                      |
|           |   | Incentive      Plan effective as of August 14, 2008, filed within this Form 10-K as      Exhibit 10.31.                   |
|           |   |                                                                                                                      |
| (10.32)*       |   | CPI      Corp. Non-Employee Directors Restricted Stock Policy (Restricted Stock      Election),                           |
|           |   | adopted      by the Company April 14, 2005, incorporated by reference to CPI Corp.'s      Annual Report                   |
|           |   | for      fiscal year 2004 on Form 10-K, Exhibit 10.92, filed April 21,      2005.                                         |
|           |   |                                                                                                                      |
| (10.33)*       |   | CPI      Corp. Non-Employee Directors Restricted Stock Policy (Restricted Stock      Election),                           |
|           |   | effective      August 14, 2008, filed within this Form 10-K as Exhibit10.33.                                              |
|           |   |                                                                                                                      |
| (10.34)*       |   | Form      of Option Agreement, incorporated by reference to CPI Corp.'s Form 8-K,      Exhibit 10.1,                      |
|           |   | filed      August 21, 2008.                                                                                               |
|           |   |                                                                                                                      |
| (10.35)*       |   | Form      of Restricted Stock Award Agreement, incorporated by reference to CPI      Corp.'s Annual Report                |
|           |   | for      fiscal year 2004 on Form 10-K, Exhibit 10.93, filed April 21,      2005.                                         |
|           |   |                                                                                                                      |
| (10.36)*       |   | CPI      Corp. Omnibus Incentive Plan, incorporated by reference to CPI Corp.'s      Form DEF 14A,                        |
|           |   | Annex      A, filed June 23, 2008.                                                                                        |
|           |   |                                                                                                                      |
| (10.37)*       |   | Employment      Agreement by and between CPI Corp. and Renato Cataldo, incorporated by      reference                     |
|           |   | to      CPI Corp.'s Form 10-Q, Exhibit 10.10, filed September 1, 2005.  File      No.  1-10204             |
|           |   |                                                                                                                      |
| (10.38)*       |   | Confidentiality,      Noncompetition and Nonsolicitation Agreement by and between CPI Corp.      and                      |
|           |   | Renato      Cataldo, incorporated by reference to CPI Corp.'s Form 10-Q, Exhibit      10.104, filed September 1, 2005.    |
|           |   |                                                                                                                      |
| (10.39)*       |   | Letter      from the Company regarding Supplemental Retirement Benefits, dated June      28, 2006,                        |
|           |   | delivered      to Richard Tarpley, incorporated by reference to CPI Corp.'s Form      8-K,                                |
|           |   | Exhibit      10.61, filed July 5, 2006.                                                                                   |
|           |   |                                                                                                                      |
| (10.40)*       |   | Letter      from the Company regarding Supplemental Retirement Benefits, dated June      28, 2006,                        |
|           |   | delivered      to Jane E. Nelson, incorporated by reference to CPI Corp.'s Form      8-K,                                 |
|           |   | Exhibit      10.62, filed July 5, 2006.                                                                                   |
|           |   |                                                                                                                      |
|  (10.41)* |   | Employment      Agreement dated September 12, 2007, by and between Thomas Gallahue      and                               |
|           |   | CPI      Corp., incorporated by reference to CPI Corp.'s Form 8-K, Exhibit      10.60,                                    |
|           |   | filed      September 18, 2007.                                                                                            |
|           |   |                                                                                                                      |
| (10.42)        |   | Purchase      and Sale Agreement dated as of May 1, 2007, by and among Portrait      Corporation                          |
|           |   | of      America, PCA LLC, American Studios, Inc., PCA Photo Corporation of      Canada,                                   |
|           |   | PCA      National LLC, PCA Finance Corp., Inc., Photo Corporation of American,      Inc.,                                 |
|           |   | (each,      a "Seller") and CPI Corp., incorporated by reference to CPI Corp.'s form      8-K,                            |
|           |   | Exhibit      2.1, filed May 3, 2007.                                                                                      |
|           |   |                                                                                                                      |
|           |   |                                                                                                                           |
|           |   |                                                                                                                           |
|           |   |                                                                                                                           |

| EXHIBIT |   |                                                                                                              |
|---------|--------|-------------------------------------------------------------------------------------------------------------------|
| NUMBER  |   | DESCRIPTION                                                                                                       |
|    |   |                                                                                                              |
| (10.43) |   | Amendment      No. 1 to the Purchase and Sale Agreement dated as of May 1, 2007,      by                          |
|    |   | and      among Portrait Corporation of America, PCA LLC, American Studios,      Inc.,                             |
|    |   | PCA      Photo Corporation of Canada, PCA National LLC, PCA Finance Corp.,      Inc.,                             |
|    |   | Photo      Corporation of American, Inc., (each, a "Seller") and CPI Corp.,      such                             |
|    |   | amendment      effective as of May 21, 2007, incorporated by reference to CPI      Corp.'s                        |
|    |   | form      8-K, Exhibit 2.1, filed May 25, 2007.                                                                   |
|    |   |                                                                                                              |
| (10.44) |   | Amendment      No. 2 to the Purchase and Sale Agreement dated as of June 8, 2007,      by                         |
|    |   | and      among Portrait Corporation of America, PCA LLC, American Studios,      Inc.,                             |
|    |   | PCA      Photo Corporation of Canada, PCA National LLC, PCA Finance Corp.,      Inc.,                             |
|    |   | Photo      Corporation of American, Inc., (each, a "Seller") and CPI      Corp.,                                  |
|    |   | incorporated      by reference to CPI Corp.'s form 8-K, Exhibit 2.3, filed June 24,      2007.                    |
|    |   |                                                                                                              |
| (10.45) |   | Second      Amended and Restated Credit Agreement dated as of June 8, 2007,      among                            |
|    |   | the      Company, the financial institutions that are or may from time to time      become parties                |
|    |   | thereto      and LaSalle Bank National Association, as administrative agent and      arranger                     |
|    |   | for      the lenders, incorporated herein by reference to CPI Corp.'s Form      8-K,                              |
|    |   | Exhibit      10.1, filed June 14, 2007.                                                                           |
|    |   |                                                                                                              |
| (10.46) |   | Second      Amendment to that certain Second Amended and Restated Credit      Agreement,                          |
|    |   | among      the Company, the financial institutions that are or may from time to time      become                  |
|    |   | parties      thereto and LaSalle Bank National Association, as administative agent      and                       |
|    |   | arranger      for the lenders, dated December 10, 2008, incorporated by reference to CPI      Corp.'s             |
|    |   | Form      8-K, Exhibit 10.1, filed December 19, 2008.                                                             |
|    |   |                                                                                                              |
| (10.47) |   | Third      Amendment to that certain Second Amended and Restated Credit      Agreement,                           |
|    |   | among      the Company, the financial institutions that are or may from time to time      become                  |
|    |   | parties      thereto and Bank of America, N.A. as successor to  LaSalle Bank      National Association, |
|    |   | as      administrative agent and arranger for the lenders, effective April      16, 2009, incorporated       |
|    |   | by      reference to CPI Corp.'s Form 8-K, Exhibit 10.47, filed April 21,      2009.                         |
|    |   |                                                                                                              |
| (10.48) |   | Master      Lease Agreement between Wal-Mart Stores  East, L.P., Wal-Mart      Stores, Inc.,            |
|    |   | Wal-Mart      Louisiana, LLC, Wal-Mart Stores Texas, LP and Portrait Corporation      of                          |
|    |   | America,      Inc., effective June 8, 2007, incorporated herein by reference to CPI      Corp.'s                  |
|    |   | Form      10-Q, Exhibit 10.59, filed August 30, 2007.  (Confidential      treatment requested                |
|    |   | for portions of this      document).                                                                              |
|    |   |                                                                                                              |
| (10.49) |   | First      Amendment to the Master Lease Agreement between Wal-Mart Stores, East,      LP,                        |
|    |   | Wal-Mart      Stores, Inc., Wal-Mart Louisiana, LLC, Wal-Mart Stores Texas, LP      and                           |
|    |   | Portrait      Corporation of America, Inc., effective June 8, 2007, incorporated herein      by                   |
|    |   | reference      to CPI Corp.'s Form 10-Q, Exhibit 10.60, filed December 20,      2007.                             |
|    |   |                                                                                                              |
| (10.50) |   | Second      Amendment to the Master Lease Agreement between Wal-Mart Stores, East,      LP,                       |
|    |   | Wal-Mart      Stores, Inc., Wal-Mart Louisiana, LLC, Wal-Mart Stores Texas, LP      and                           |
|    |   | Portrait      Corporation of America, Inc., effective June 8, 2007, incorporated herein      by                   |
|    |   | reference      to CPI Corp.'s Form 10-Q, Exhibit 10.61, filed December 20,      2007.                             |

| EXHIBIT  |   |                                                                                                                   |
|----------|--------|------------------------------------------------------------------------------------------------------------------------|
| NUMBER   |   | DESCRIPTION                                                                                                            |
|     |   |                                                                                                                   |
| (10.51)  |   | License      Agreement dated December 22, 2008, by and between CPI Corp., Consumer      Programs Incorporated,         |
|     |   | a      subsidiary of the Company, and Sears, Roebuck and Co. (confidential      treatment requested for portions       |
|     |   | of      this document), incorporated by reference to CPI Corp.'s Form 8-K, Exhibit      10.1, filed December 24, 2008. |
|     |   |                                                                                                                   |
| (10.52)  |   | Letter      Agreement dated December 22, 2008, by and between CPI Corp., Consumer      Programs Incorporated, a        |
|     |   | subsidiary      of the Company, and Sears, Roebuck and Co., incorporated by reference to      CPI Corp.'s              |
|     |   | Form      8-K, Exhibit 10.2, filed December 24, 2008.                                                                  |
|     |   |                                                                                                                   |
| (10.53)* |   | Employment      Agreement by and between CPI Corp. and Dale Heins, dated April 23,      2008,                          |
|     |   | incorporated      herein by reference to CPI Corp.'s Form 8-K, Exhibit 10.62, filed April      24, 2008.               |
|     |   |                                                                                                                   |
| (10.54)* |   | Employment      Agreement by and between CPI Corp. and Jim Mills, dated September 2,      2008,                        |
|     |   | incorporated      herein by reference to CPI Corp.'s Form 10-Q, Exhibit 10.65,      filed                              |
|     |   | December      20, 2007.                                                                                                |
|     |   |                                                                                                                   |
| (10.55)* |   | Chairman's      Agreement by and between CPI Corp. and David Meyer, dated September 22,      2008,                     |
|     |   | incorporated      herein by reference to CPI Corp.'s Form 10-Q, Exhibit    10.65,                                      |
|     |   | filed      December 20, 2007.                                                                                          |
|     |   |                                                                                                                   |
| (10.56)* |   | Settlement      and Release Agreement by and between Consumer Programs Incorporated      and                           |
|     |   | Jane      E. Nelson entered into as of December 31, 2008, incorporated herein by      reference                        |
|     |   | to      CPI Corp.'s Form 8-K, Exhibit 10.67, filed January 7,  2009.                                                   |
|     |   |                                                                                                                   |
| (10.57)* |   | Release      and Settlement Agreement by and between Consumer Programs Incorporated      and                           |
|     |   | Gary      W. Douglass entered into as of December 31, 2008, incorporated herein by      reference to                   |
|     |   | CPI      Corp.'s Form 8-K, Exhibit 10.68, filed January 7, 2009.                                                       |
|     |   |                                                                                                                   |
| (11.1)   |   | Computation      of (Loss) Income Per Share - Diluted                                                   |
|     |   |                                                                                                                   |
| (11.2)   |   | Computation      of (Loss) Income Per Share - Basic                                                          |
|     |   |                                                                                                                   |
| (21.0)   |   | Subsidiaries      of the Registrant                                                                                    |
|     |   |                                                                                                                   |
| (23.0)   |   | Independent      Registered Public Accounting Firm's Consent                                                           |
|     |   |                                                                                                                   |
| (31.1)   |   | Certification      Pursuant to Rule 13a-14(a) Under the Securities and Exchange Act of      1934                       |
|     |   | by      the President and Chief Executive Officer                                                                      |
|     |   |                                                                                                                   |
| (31.2)   |   | Certification      Pursuant to Rule 13a-14(a) Under the Securities and Exchange Act of      1934                       |
|     |   | by      the Executive Vice President, Finance and 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 President and Chief Executive Officer and      the                              |
|     |   | Executive      Vice President, Finance and Chief Financial  Officer                                                    |

| (b)   | Exhibits: |
|-----------------|-----------|

|   | -      See Item 15(a)(3) |
|--------|--------------------------|

| (c)   | Financial Statement      Schedules: |
|-----------------|-------------------------------------|

|   | -      See Item 15(a)(2) |
|--------|--------------------------|

SIGNATURES

|   | CPI CORP. |                                       |
|--------|-----------|--------------------------------------------|
|   |      |                                       |   |
|   | By:       | /s/Renato      Cataldo                     |   |
|   |      | Renato      Cataldo                        |   |
|   |      | President      and Chief Executive Officer |   |
|   |      |                                       |   |

| SIGNATURES      OF DIRECTORS AND PRINCIPAL OFFICERS |
|-----------------------------------------------------|
|                                                |
|                                                |   |   | Signature |   | Title |   | Date |
|                                                |
|                                                | /s/ |   | Renato      Cataldo |   | President      and Chief Executive Officer |   | April      21, 2009 |
|                                                |   |   | (Renato      Cataldo) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | David      M. Meyer |   | Chairman      of the Board of Directors |   | April      21, 2009 |
|                                                |   |   | (David      M. Meyer) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | James      J. Abel |   | Director |   | April      21, 2009 |
|                                                |   |   | (James      J. Abel) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |   |
|                                                | /s/ |   | Peter      Feld |   | Director |   | April      21, 2009 |
|                                                |   |   |   | (Peter      Feld) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | Michael      S. Koeneke |   | Director |   | April      21, 2009 |
|                                                |   |   | (Michael      S. Koeneke) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | Michael      Glazer |   | Director |   | April      21, 2009 |
|                                                |   |   | (Michael      Glazer) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | John      Turner White, IV |   | Director |   | April      21, 2009 |
|                                                |   |   | (John      Turner White, IV) |   |   |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | Dale      Heins |   | Senior      Vice President, Finance, |   | April      21, 2009 |
|                                                |   |   | (Dale      Heins) |   | Chief      Financial Officer and Treasurer |   |   |
|                                                |   |   |   |   |   |   |   |
|                                                | /s/ |   | Rose      O'Brien |   | Vice      President, Corporate Controller |   | April      21, 2009 |
|                                                |   |   | (Rose      O'Brien) |   | and      Principal Accounting Officer |   |   |