----

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

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

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|   TABLE OF CONTENTS |
|--------------------------|
| PART I                   |
|                     |
| Item 1.                  |   | Business |   | 3 |
| Item 1A.                 |   | Risk Factors |   | 8 |
| Item 1B.                 |   | Unresolved Staff Comments |   | 11 |
| Item 2.                  |   | Properties |   | 12 |
| Item 3.                  |   | Legal Proceedings |   | 12 |
|                     |   |   |
| PART II                  |   |   |
|                     |   |   |
| Item 5.                  |   | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   |         13 |
| Item 6.                  |   | Selected 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 |   |   28 |
| Item 8.                  |   | Financial Statements and Supplementary Data |   | 29 |
| Item 9.                  |   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |   |   65 |
| Item 9A.                 |   | Controls and Procedures |   | 65 |
| Item 9B.                 |   | Other Information |   | 68 |
|                     |   |   |
| PART III                 |   |   |
|                     |   |   |
| Item 10.                 |   | Directors, Executive Officers and Corporate Governance |   | 69 |
| Item 11.                 |   | Executive Compensation |   | 69 |
| Item 12.                 |   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |   |   69 |
| Item 13.                 |   | Certain Relationships and Related Transactions, and Director Independence |   |   70 |
| Item 14.                 |   | Principal Accounting Fees and Services |   | 70 |
|                     |   |   |
| PART IV                  |   |   |
|                     |   |   |
| Item 15.                 |   | Exhibits and Financial Statement Schedules |   | 70 |
|                     |   | Signatures |   | 76 |

| 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            |        | Unoccupied Administration and Portrait processing facility (includes 696,000 square feet in land)              |         | Owned  | (1)         |
| 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            |        | Unoccupied Administration, Warehousing and Portrait processing facility (includes 116,000 square feet in land) | Owned        | (1)    |
| St. Louis, Missouri       |   |                    53,000 |        | Warehousing                                                                                                    |         |   |        | Leased | (2)      |
| Charlotte, North Carolina |   |                    51,000 |        | Parking Lots                                                                                                   |         |   |        | Owned  |     |

| (1) |   | Properties are held for sale.  See Note 7 to the Notes to Consolidated Financial Statements for further discussion. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Lease term expires on July 31, 2018.                                                                                          |

| NUMBER                                                                                                                           |   |   |                          |                |                                                  |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|---------------------|-------------------------------------------------------|
| OF STUDIOS                                                                                                                       |   |   | COUNTRY                       |                | LICENSOR/LESSOR                                       |
|                                                                                                                             |
|                    871            |   |   | United States and Puerto Rico |                | Sears                                                 |
|                 1,549                            |   |   | United States and Puerto Rico |                | Walmart                                               |
|                    110            |   |   | Canada                        |                | Sears Canada, Inc.                                    |
|                    260            |   |   | Canada                        |                | Walmart Canada Corp.                                  |
|                    114            |   |   | Mexico                        |                | Nueva Walmart de Mexico, S, de R.L. de C.V.           |
|                      31 |   |   | United States studios not     |                | Third parties - generally leased for at least 3 years |
|                                                                                                                             |   |   |                          | in Sears or Walmart |                                                  |   | with some having renewal options |

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

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

| FISCAL YEAR 2009          |   |   |   |   |   |   |   |     |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
| (ending February 6, 2010) |   | HIGH   |   |   | LOW    |   |   | DIVIDEND |   |
| First Quarter             |   | $      | 10.86  |   |   | $      | 6.00   |     |   | $ | 0.16 |   |
| Second Quarter            |   |   | 18.80  |   |   |   | 9.90   |     |   |   | 0.16 |   |
| Third Quarter             |   |   | 18.78  |   |   |   | 9.99   |     |   |   | 0.16 |   |
| Fourth Quarter            |   |   | 15.00  |   |   |   | 11.60  |     |   |   | 0.16 |   |

| 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 |   |

|         | 2005                                                                                 | 2006                                                                                       | 2007                                                                                                   | 2008                                                                                                   | 2009                                                                                                        | 2010                                                                                 |
|--------------|--------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
| CPY          |              100.00 |               123.98 |                 367.18 |                 142.75 |                  54.44 |              104.84 |
| S&P 500  |              100.00 |               110.26 |                 126.04 |                 123.26 |                  76.35 |              101.33 |
| Russell 2000 |              100.00 |               118.80 |                 131.15 |                 118.48 |                  75.27 |              103.51 |

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

| in thousands except share and per share data                                                                                                                |   | 2009   |    |   | 2008   |   |    | 2007   |   |   | 2006    |   |   | 2005   |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| STATEMENT OF OPERATIONS (1)                                                                                                                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|     Net sales                                                                                                                                |   | $      | 422,371 |   |   | $      | 462,548 |   |   | $      | 423,429 |   |   | $      | 292,973 |   |   | $ | 291,098 |   |
|                Cost of sales (exclusive of depreciation and amortization shown below) |   |   | 30,626  |   |   |   | 43,280  |   |   |   | 47,135  |   |   |   | 30,211  |   |   |   | 41,257 |   |
|                Selling, general and administrative expenses                           |   |   | 339,138 |   |   |   | 377,310 |   |   |   | 326,568 |   |   |   | 218,282 |   |   |   | 215,102 |   |
|             Depreciation and amortization                                                            |   |   | 22,740  |   |   |   | 29,432  |   |   |   | 27,291  |   |   |   | 16,861  |   |   |   | 19,904 |   |
|             Other charges and impairments (2)                                                        |   |   | 3,294   |   |   |   | 13,557  |   |   |   | 7,695   |   |   |   | 1,241   |   |   |   | 2,767 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Income (loss) from continuing operations                                                                                                                    |   |   | 26,573  |   |   |   | (1,031  | )      |   |   | 14,740  |   |   |   | 26,378  |   |   |   | 12,068 |   |
|          Interest expense, net (3)                                                                                  |   |   | 6,936   |   |   |   | 8,527   |   |   |   | 8,818   |   |   |   | 1,815   |   |   |   | 1,098 |   |
|             Other (expense) income, net (4)                                                          |   |   | (44     | )      |   |   | 190     |   |   |   | 175     |   |   |   | 1,031   |   |   |   | (282 | ) |
|             Income tax expense (benefit)                                                             |   |   | 5,796   |   |   |   | (2,644  | )      |   |   | 2,080   |   |   |   | 9,164   |   |   |   | 1,889 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                Net income (loss) from continuing operations                           |   |   | 13,797  |   |   |   | (6,724  | )      |   |   | 4,017   |   |   |   | 16,430  |   |   |   | 8,799 |   |
|                Net (loss) income from discontinued operations, net of tax (1)         |   |   | -       |   |   |   | (961    | )      |   |   | (441    | )      |   |   | (103    | ) |   |   | 73 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|  Net income (loss)                                                                                                                                     |   | $      | 13,797  |   |   | $      | (7,685  | )      |   | $      | 3,576   |   |   | $      | 16,327  |   |   | $ | 8,872 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| SHARE AND PER SHARE DATA (1)                                                                                                                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                Net income (loss) from continuing operations - diluted (5)        |   | $      | 1.97    |   |   | $      | (1.03   | )      |   | $      | 0.63    |   |   | $      | 2.58    |   |   | $ | 1.12 |   |
|                Net income (loss) from continuing operations - basic (5)               |   | $      | 1.97    |   |   | $      | (1.03   | )      |   | $      | 0.63    |   |   | $      | 2.59    |   |   | $ | 1.12 |   |
|             Net income (loss) - diluted                                                              |   | $      | 1.97    |   |   | $      | (1.18   | )      |   | $      | 0.56    |   |   | $      | 2.56    |   |   | $ | 1.13 |   |
|             Net income (loss) - basic                                                                |   | $      | 1.97    |   |   | $      | (1.18   | )      |   | $      | 0.56    |   |   | $      | 2.57    |   |   | $ | 1.13 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|     Dividends                                                                                                                                |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $      | 0.64    |   |   | $ | 0.64 |   |
|             Average shares outstanding - diluted                                                     |   |   | 7,020   |   |   |   | 6,510   |   |   |   | 6,416   |   |   |   | 6,376   |   |   |   | 7,881 |   |
|             Average shares outstanding - basic                                                       |   |   | 6,993   |   |   |   | 6,510   |   |   |   | 6,391   |   |   |   | 6,353   |   |   |   | 7,854 |   |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| CASH FLOW DATA (continuing operations only)                                                                                                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                Net cash provided by operating activities                              |   | $      | 31,289  |   |   | $      | 12,663  |   |   | $      | 39,872  |   |   | $      | 37,993  |   |   | $ | 18,624 |   |
|                Net cash (used in) provided by financing activities                    |   | $      | (33,494 | )      |   | $      | (13,419 | )      |   | $      | 90,788  |   |   | $      | (43,567 | ) |   | $ | (1,223 | ) |
|             Net cash used in investing activities                                                    |   | $      | (2,876  | )      |   | $      | (33,488 | )      |   | $      | (97,653 | )      |   | $      | (2,358  | ) |   | $ | (17,633 | ) |
|                                                                                                                                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|          Capital expenditures                                                                                       |   | $      | 5,234   |   |   | $      | 36,074  |   |   | $      | 14,884  |   |   | $      | 2,760   |   |   | $ | 20,235 |   |

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

| in thousands                                         |   | 2009   |    |   | 2008   |   |    | 2007   |   |   | 2006    |   |   | 2005   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|
|                                                 |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |
| BALANCE SHEET                                        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |
|    Cash and cash equivalents               |   | $      | 18,913  |   |   | $      | 23,665  |   |   | $      | 59,177  |   |   | $      | 26,294 |   |   | $ | 34,269 |   |
|    Current assets                          |   |   | 53,555  |   |   |   | 61,480  |   |   |   | 92,835  |   |   |   | 55,164 |   |   |   | 69,629 |   |
|    Net fixed assets                        |   |   | 34,169  |   |   |   | 50,887  |   |   |   | 56,280  |   |   |   | 26,693 |   |   |   | 41,282 |   |
|    Goodwill and intangible assets (6)      |   |   | 60,380  |   |   |   | 61,665  |   |   |   | 62,956  |   |   |   | 512    |   |   |   | 512 |   |
|    Other assets                            |   |   | 18,487  |   |   |   | 18,823  |   |   |   | 27,152  |   |   |   | 11,379 |   |   |   | 15,641 |   |
|    Total assets                            |   |   | 166,591 |   |   |   | 192,855 |   |   |   | 239,223 |   |   |   | 93,748 |   |   |   | 127,064 |   |
|    Current liabilities                     |   |   | 62,643  |   |   |   | 55,010  |   |   |   | 83,051  |   |   |   | 49,407 |   |   |   | 56,065 |   |
|    Long-term debt, less current maturities |   |   | 57,855  |   |   |   | 104,578 |   |   |   | 105,728 |   |   |   | 8,333  |   |   |   | 16,667 |   |
|    Other liabilities                       |   |   | 35,905  |   |   |   | 32,432  |   |   |   | 33,470  |   |   |   | 23,209 |   |   |   | 25,739 |   |
|    Stockholders' equity (5)                |   |   | 10,188  |   |   |   | 835     |   |   |   | 16,974  |   |   |   | 12,799 |   |   |   | 28,593 |   |

| (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                                                                                                                                                         |

| (2) |   | Other charges and impairments: |
|-----|--------|--------------------------------|

| in thousands                                                               |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserves for severance and related costs (a)                               |   | $      | 970    |   |   | $      | 2,046  |   |   | $      | 2,035  |   |   | $      | 878    |   |   | $ | 2,546 |   |
| Proxy contest fees (b)                                                     |   |   | 871    |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Other transition related costs - PCA Acquisition (c)                       |   |   | 527    |   |   |   | 1,255  |   |   |   | 2,817  |   |   |   | -      |   |   |   | - |   |
| Impairment charges (d)                                                     |   |   | 300    |   |   |   | 739    |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Sears fees related to the settlement of the previous license agreement (e) |   |   | -      |   |   |   | 7,527  |   |   |   | 2,500  |   |   |   | -      |   |   |   | - |   |
| Other  (f)                                                       |   |   | 626    |   |   |   | 1,990  |   |   |   | 343    |   |   |   | 363    |   |   |   | 221 |   |
|                                                                       |   | $      | 3,294  |   |   | $      | 13,557 |   |   | $      | 7,695  |   |   | $      | 1,241  |   |   | $ | 2,767 |   |

| (a)    |   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)    |   | Relates to certain fees incurred in connection with the proxy contest in 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (c)    |   | Consists of integration-related costs relative to the PCA Acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (d)(e) |   | Consists of 2009 and 2008 write-downs of certain asset values held for sale.Consists of certain fees and charges related to the settlement of the previous Sears license agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (f)    |   | Costs in 2009 primarily relate to net legal expense incurred in connection with the settlement of the Picture Me Press LLC vs. Portrait Corporation of America case.  Costs in 2008 primarily related to legal expense incurred for the settlement of the Portraits International of the Southwest vs. CPI Corp. case and in connection with the Picture Me Press LLC vs. Portrait Corporation of America case.  Costs in 2007 primarily related to the write-off of software that is no longer used in the business.  Costs in 2006 represent professional service expense in connection with a strategic alternative review and the write-off of certain legacy equipment that is no longer used in the business.  Costs in 2005 consist primarily of the write-off of certain film assets resulting from the digital conversion of SPS, offset in part by a favorable claim settlement resulting in a refund related to previously paid loan commitment fees and costs. |

| (3)    |   | In 2009, 2008 and 2007, includes (income) expense of ($1.5 million), $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 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)    |   | The Company recorded the repurchase of 1,658,607 shares of common stock for $32.4 million in 2006.                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (6)    |   | At the time of the PCA Acquisition, the Company acquired a host agreement and customer list with Walmart and additional goodwill.  See Note 8 to the Notes to Consolidated Financial Statements for further discussion.                                                                                                                                                                                                                                                                      |

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

|                                         |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                         |   |   |   |   |   |   |   |   |   |
| Within Sears stores:                         |   |   |   |   |   |   |   |   |   |
| United States and Puerto Rico                |   |   | 871    |   |   |   | 887    |   |   |   | 893 |   |
| Canada                                       |   |   | 110    |   |   |   | 110    |   |   |   | 112 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Within Walmart stores:                       |   |   |   |   |   |   |   |   |   |   |   |   |
| United States and Puerto Rico                |   |   | 1,549  |   |   |   | 1,642  |   |   |   | 1,702 |   |
| Canada                                       |   |   | 260    |   |   |   | 259    |   |   |   | 253 |   |
| Mexico                                       |   |   | 114    |   |   |   | 118    |   |   |   | 115 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Locations not within Sears or Walmart stores |   |   | 31     |   |   |   | 30     |   |   |   | 33 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                        |   |   | 2,935  |   |   |   | 3,046  |   |   |   | 3,108 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands, except per share data                                                  |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|--------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                                 |   |   |    |   |   |   |    |   |   |
| Net sales                                                                            |   | $      | 422,371 |   |   | $      | 462,548 |   |   | $ | 423,429 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Cost and expenses:                                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Cost of sales (exclusive of depreciation and amortization shown below)               |   |   | 30,626  |   |   |   | 43,280  |   |   |   | 47,135 |   |
| Selling, general and administrative expenses                                         |   |   | 339,138 |   |   |   | 377,310 |   |   |   | 326,568 |   |
| Depreciation and amortization                                                        |   |   | 22,740  |   |   |   | 29,432  |   |   |   | 27,291 |   |
| Other charges and impairments                                                        |   |   | 3,294   |   |   |   | 13,557  |   |   |   | 7,695 |   |
|                                                                                 |   |   | 395,798 |   |   |   | 463,579 |   |   |   | 408,689 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Income (loss) from continuing operations                                             |   |   | 26,573  |   |   |   | (1,031  | )      |   |   | 14,740 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest expense                                                                     |   |   | 7,392   |   |   |   | 9,147   |   |   |   | 10,652 |   |
| Interest income                                                                      |   |   | 456     |   |   |   | 620     |   |   |   | 1,834 |   |
| Other (expense) income, net                                                          |   |   | (44     | )      |   |   | 190     |   |   |   | 175 |   |
| Income (loss) from continuing operations before income tax expense (benefit)         |   |   | 19,593  |   |   |   | (9,368  | )      |   |   | 6,097 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Income tax expense (benefit)                                                         |   |   | 5,796   |   |   |   | (2,644  | )      |   |   | 2,080 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Net income (loss) from continuing operations                                         |   |   | 13,797  |   |   |   | (6,724  | )      |   |   | 4,017 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Net loss from discontinued operations, net of income tax benefit                     |   |   | -       |   |   |   | (961    | )      |   |   | (441 | ) |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| NET INCOME (LOSS)                                                                    |   | $      | 13,797  |   |   | $      | (7,685  | )      |   | $ | 3,576 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| NET INCOME (LOSS) PER COMMON SHARE                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Net income (loss) per share from continuing operations - diluted                     |   | $      | 1.97    |   |   | $      | (1.03   | )      |   | $ | 0.63 |   |
| Net loss per share from discontinued operations - diluted                            |   |   | -       |   |   |   | (0.15   | )      |   |   | (0.07 | ) |
| Net income (loss) per share - diluted                                                |   | $      | 1.97    |   |   | $      | (1.18   | )      |   | $ | 0.56 |   |
|                                                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Weighted average number of common and common equivalent shares outstanding - diluted |   |   | 7,020   |   |   |   | 6,510   |   |   |   | 6,416 |   |

| ·   | Net sales for 2009 decreased $40.1 million, or 9%, to $422.4 million from the $462.5 million reported in 2008.  Excluding the negative impacts of store closures ($8.9 million), the 53rd week in the prior year ($7.0 million), net revenue recognition change ($4.1 million), revenue deferral related to positive response to the Company’s loyalty programs ($4.0 million), foreign currency translation ($1.9 million) and other net impacts ($1.1 million), comparable same-store sales decreased approximately 3%. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cost of sales, excluding depreciation and amortization expense, was $30.6 million, $43.3 million and $47.1 million in 2009, 2008 and 2007, respectively. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Selling, general and administrative (“SG&A”) expense was $339.1 million, $377.3 million and $326.6 million for fiscal years 2009, 2008 and 2007, respectively. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation and amortization expense was $22.7 million in 2009 compared to $29.4 million in 2008 and $27.3 million in 2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other charges and impairments reflect costs incurred from strategic actions implemented by the Company to restructure its operations, costs that are unpredictable and atypical of the Company’s operations and additional charges due to asset impairments.  Actions taken during 2009, 2008 and 2007 are as follows: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| in thousands                                                                            |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                    |   |   |   |   |   |   |   |   |   |
| Recorded as a component of income (loss) from operations:                               |   |   |   |   |   |   |   |   |   |
|    Reserves for severance and related costs (1)                               |   | $      | 970    |   |   | $      | 2,046  |   |   | $ | 2,035 |   |
|    Proxy contest fees (2)                                                     |   |   | 871    |   |   |   | -      |   |   |   | - |   |
|    Other transition related costs - PCA Acquisition (3)                       |   |   | 527    |   |   |   | 1,255  |   |   |   | 2,817 |   |
|    Impairment charges (4)                                                     |   |   | 300    |   |   |   | 739    |   |   |   | - |   |
|    Sears fees related to the settlement of the previous license agreement (5) |   |   | -      |   |   |   | 7,527  |   |   |   | 2,500 |   |
|    Other (6)                                                                  |   |   | 626    |   |   |   | 1,990  |   |   |   | 343 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total Other Charges and Impairments                                        |   | $      | 3,294  |   |   | $      | 13,557 |   |   | $ | 7,695 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Charges in 2009 primarily relate to severance costs resulting from the termination of employees in connection with the closure of the film lab facility in Canada due to the digital conversion of the SPS Canada studios. Charges in 2008 and 2007 were principally related to severance costs resulting from the termination of employees in connection with the integration of operations of the PCA Acquisition into CPI. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Charges relate to certain fees incurred in connection with the proxy contest in 2009. |
|-----------------|---------------------------------------------------------------------------------------|

| (3)   | During 2009, expense primarily relates to lab closure-related costs of $1.1 million.  This expense is offset in part by a $546,000 net gain recognized on the sale of certain properties previously held for sale. During 2008, expense primarily related to lab closure-related costs of $902,000.  The remainder of expense related to professional service and consultant costs associated with the transition. 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) and cure costs associated with contractual obligations transferred from PCA to CPI ($523,000). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | During 2009 and 2008, the Company incurred $300,000 and $739,000, respectively, related to the write-down of certain asset values held for sale. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | In 2008 and 2007, the Company incurred certain fees and charges in relation to the settlement of the previous Sears license agreement.  These fees and charges are discussed further in Item 1, “Business” and in Note 16 to the Notes to Consolidated Financial Statements. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Costs in 2009 primarily relate to net legal expense of $527,000 incurred in connection with the settlement of the Picture Me Press LLC vs. Portrait Corporation of America case as well as the write-off of certain Canada film inventory due to the digital conversion of the SPS Canada studios.  These expenses are offset in part by a reduction in certain lease obligation reserves of $288,000.   Costs in 2008 primarily related to legal expense of $913,000 incurred for the settlement of the Portraits International of the Southwest vs. CPI Corp. case and $866,000 incurred in connection with the Picture Me Press LLC vs. Portrait Corporation of America case.  The remainder of expense related to executive recruitment expense and a contract negotiation with a director.  Costs in 2007 primarily related to charges incurred related to software that is no longer used in the business, one-time strategic studies and legal charges. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| in thousands                                                 |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|--------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                         |   |   |    |   |   |   |    |   |   |
| Net cash (used in) provided by:                              |   |   |    |   |   |   |    |   |   |
| Operating activities (1)                                     |   | $      | 31,289  |   |   | $      | 11,847  |   |   | $ | 39,466 |   |
| Financing activities                                         |   |   | (33,494 | )      |   |   | (13,419 | )      |   |   | 90,788 |   |
| Investing activities                                         |   |   | (2,876  | )      |   |   | (33,488 | )      |   |   | (97,653 | ) |
| Effect of exchange rate changes on cash and cash equivalents |   |   | 329     |   |   |   | (452    | )      |   |   | 282 |   |
| Net (decrease) increase in cash and cash equivalents         |   | $      | (4,752  | )      |   | $      | (35,512 | )      |   | $ | 32,883 |   |
|                                                         |   |   |    |   |   |   |    |   |   |   |   |   |

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

| in thousands                                    |   | PAYMENTS DUE BY PERIOD |   |
|-------------------------------------------------|--------|------------------------|--------|
|                                            |   |                   |   |   |   |   |   |   |   |   |   |   |   | 2015 & |   |
|                                            |   | Total                  |   |   | 2010 |   |   |   | 2011-12 |   |   |   | 2013-14 |   |   | Beyond |   |
| Contractual obligations:                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt (1)                              |   | $                      | 77,541 |   |   | $ | 19,686 |   |   | $ | 57,855 |   |   | $ | - |   |   | $ | - |   |
| Interest expense (2)                            |   |                   | 8,513  |   |   |   | 3,626 |   |   |   | 4,887 |   |   |   | - |   |   |   | - |   |
| Operating leases                                |   |                   | 3,035  |   |   |   | 616 |   |   |   | 888 |   |   |   | 568 |   |   |   | 963 |   |
|   Purchase obligations for                 |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| materials and services (3)                      |   |                   | 6,428  |   |   |   | 4,655 |   |   |   | 1,773 |   |   |   | - |   |   |   | - |   |
|   Pension plan obligations (4)             |   |                   | 1,694  |   |   |   | 1,694 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Sears Agreement settlement fees (5) |   |                   | 750    |   |   |   | 150 |   |   |   | 300 |   |   |   | 300 |   |   |   | - |   |
| Other liabilities (6)                           |   |                   | 676    |   |   |   | 566 |   |   |   | 98 |   |   |   | 12 |   |   |   | - |   |
|                                            |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                                           |   | $                      | 98,637 |   |   | $ | 30,993 |   |   | $ | 65,801 |   |   | $ | 880 |   |   | $ | 963 |   |
|                                            |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                  |   | AMOUNT OF COMMITMENT EXPIRATION PER PERIOD |   |
|-------------------------------|--------|--------------------------------------------|--------|
|                          |   |                                       |   |   |   |   |   |   |   |   |   |   |   | 2015 & |   |
|                          |   | Total                                      |   |   | 2010 |   |   |   | 2011-12 |   |   |   | 2013-14 |   |   | Beyond |   |
| Other commitments:            |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Standby letters of credit (7) |   | $                                          | 16,980 |   |   | $ | 16,980 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Contingent lease obligations  |   |                                       | 210    |   |   |   | 120 |   |   |   | 90 |   |   |   | - |   |   |   | - |   |
|                          |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                         |   | $                                          | 17,190 |   |   | $ | 17,100 |   |   | $ | 90 |   |   | $ | - |   |   | $ | - |   |
|                          |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)    |   | The long-term debt agreement includes mandatory prepayments based on the Company’s levels of cash flow and certain transactions; these amounts for 2011 are not incorporated since they are not currently estimable.  Payments in 2010 reflect a voluntary debt prepayment of $5.0 million made on April 16, 2010.  The Company, in connection with its 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 6, 2010.  The purchase commitments relate principally to photographic paper, manufacturing supplies, telecommunication services, database maintenance contracts and marketing initiatives.                                                                                                                                                                                                                                                                                                                              |
| (4)    |   | The Company anticipates it will make a contribution of approximately $1.7 million to the pension plan in 2010.  Obligations beyond 2010 are not currently estimable.  Future contributions to the pension plan will be dependent upon legislation, future changes in discount rates and the earnings performance of the plan assets.                                                                                                                                                                                                                                         |
| (5)    |   | The Company is obligated to remit to Sears additional payments as stipulated in the settlement of the previous license agreement.  A $150,000 payment is due to Sears on December 31 of each year through 2014.                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (6)    |   | Amounts consist primarily of accruals for severance and related costs, which are recorded at the contractual amounts due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (7)    |   | 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.                                                                                                                                                                                                                                                                                                                                                                             |

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

| Notional amount        |   | $57,500,000        |
|------------------------|--------|--------------------|
| Fixed rate paid        |   | 4.97%              |
| Variable rate received |   | 0.23%              |
| Effective date         |   | September 17, 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 6, 2010 and February 7, 2009 | 31-32 |
|   |                 | -      |   | Consolidated Statements of Operations for the fiscal years ended |   |
|   |                 |   |   |   | February 6, 2010, February 7, 2009 and February 2, 2008 | 33 |
|   |                 | -      |   | Consolidated Statements of Changes in Stockholders' Equity |   |
|   |                 |   |   |   | for the fiscal years ended February 6, 2010, February 7, 2009 and February 2, 2008 | 34 |
|   |                 | -      |   | Consolidated Statements of Cash Flows for the fiscal years ended February 6, 2010, |   |
|   |                 |   |   |   | February 7, 2009 and February 2, 2008 | 35-37 |
|   |                 | -      |   | Notes to Consolidated Financial Statements | 38-66 |

Report

| in thousands                                           |   | February 6, 2010 |    |   | February 7, 2009 |   |
|--------------------------------------------------------|--------|------------------|---------|--------|------------------|--------|
|                                                   |   |             |    |   |             |   |
| ASSETS                                                 |   |             |    |   |             |   |
| Current assets:                                        |   |             |    |   |             |   |
| Cash and cash equivalents                              |   | $                | 18,913  |   |             | $      | 23,665 |   |
| Accounts receivable:                                   |   |             |    |   |             |   |   |   |
| Trade                                                  |   |             | 5,960   |   |             |   | 6,050 |   |
| Other                                                  |   |             | 880     |   |             |   | 923 |   |
| Inventories                                            |   |             | 7,465   |   |             |   | 8,489 |   |
| Prepaid expenses and other current assets              |   |             | 5,396   |   |             |   | 5,800 |   |
| Refundable income taxes                                |   |             | 1,350   |   |             |   | 357 |   |
| Deferred tax assets                                    |   |             | 7,253   |   |             |   | 9,581 |   |
| Assets held for sale                                   |   |             | 6,338   |   |             |   | 6,615 |   |
|                                                   |   |             |    |   |             |   |   |   |
| Total current assets                                   |   |             | 53,555  |   |             |   | 61,480 |   |
|                                                   |   |             |    |   |             |   |   |   |
| Property and equipment:                                |   |             |    |   |             |   |   |   |
| Land                                                   |   |             | 2,185   |   |             |   | 3,249 |   |
|   Buildings and building improvements             |   |             | 25,289  |   |             |   | 32,377 |   |
|   Leasehold improvements                          |   |             | 4,491   |   |             |   | 4,406 |   |
|   Photographic, sales and manufacturing equipment |   |             | 168,371 |   |             |   | 178,732 |   |
| Total                                                  |   |             | 200,336 |   |             |   | 218,764 |   |
|   Less accumulated depreciation and amortization  |   |             | 166,167 |   |             |   | 167,877 |   |
|     Property and equipment, net         |   |             | 34,169  |   |             |   | 50,887 |   |
| Prepaid debt fees                                      |   |             | 2,237   |   |             |   | 2,262 |   |
| Goodwill                                               |   |             | 21,720  |   |             |   | 21,459 |   |
| Intangible assets, net                                 |   |             | 38,660  |   |             |   | 40,206 |   |
| Deferred tax assets                                    |   |             | 7,701   |   |             |   | 8,359 |   |
| Other assets                                           |   |             | 8,549   |   |             |   | 8,202 |   |
|                                                   |   |             |    |   |             |   |   |   |
| TOTAL ASSETS                                           |   | $                | 166,591 |   |             | $      | 192,855 |   |
|                                                   |   |             |    |   |             |   |   |   |

Consolidated Balance Sheets 

| in thousands, except share and per share data                                        |   | February 6, 2010 |    |   | February 7, 2009 |   |
|--------------------------------------------------------------------------------------|--------|------------------|---------|--------|------------------|--------|
|                                                                                 |   |             |    |   |             |   |
| LIABILITIES                                                                          |   |             |    |   |             |   |
| Current liabilities:                                                                 |   |             |    |   |             |   |
| Current maturities of long-term debt                                                 |   | $                | 19,686  |   |             | $      | 1,150 |   |
| Accounts payable                                                                     |   |             | 4,390   |   |             |   | 6,816 |   |
| Accrued employment costs                                                             |   |             | 9,878   |   |             |   | 10,146 |   |
| Customer deposit liability                                                           |   |             | 11,528  |   |             |   | 12,503 |   |
| Sales taxes payable                                                                  |   |             | 3,929   |   |             |   | 5,284 |   |
| Accrued advertising expenses                                                         |   |             | 1,062   |   |             |   | 978 |   |
| Accrued expenses and other liabilities                                               |   |             | 12,170  |   |             |   | 18,133 |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| Total current liabilities                                                            |   |             | 62,643  |   |             |   | 55,010 |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| Long-term debt, less current maturities                                              |   |             | 57,855  |   |             |   | 104,578 |   |
| Accrued pension plan obligations                                                     |   |             | 17,724  |   |             |   | 10,591 |   |
| Other liabilities                                                                    |   |             | 18,181  |   |             |   | 21,841 |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| Total liabilities                                                                    |   |             | 156,403 |   |             |   | 192,020 |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| CONTINGENCIES (See Note 16)                                                          |   |             |    |   |             |   |   |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| 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; 9,184,081 and 17,089,788 |   |             |    |   |             |   |   |   |
| shares outstanding at February 6, 2010, and February 7, 2009, respectively           |   |             | 3,674   |   |             |   | 6,836 |   |
| Additional paid-in capital                                                           |   |             | 29,017  |   |             |   | 55,394 |   |
| Retained earnings                                                                    |   |             | 41,516  |   |             |   | 183,723 |   |
| Accumulated other comprehensive loss                                                 |   |             | (14,887 | )      |             |   | (13,114 | ) |
|                                                                                 |   |             | 59,320  |   |             |   | 232,839 |   |
| Treasury stock - at cost, 2,175,591 and  10,270,319 shares at              |   |             |    |   |             |   |   |   |
| February 6, 2010, and February 7, 2009, respectively                                 |   |             | (49,132 | )      |             |   | (232,004 | ) |
|                                                                                 |   |             |    |   |             |   |   |   |
| Total stockholders' equity                                                           |   |             | 10,188  |   |             |   | 835 |   |
|                                                                                 |   |             |    |   |             |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           |   | $                | 166,591 |   |             | $      | 192,855 |   |
|                                                                                 |   |             |    |   |             |   |   |   |

Consolidated 

| in thousands, except share and per share data                          |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                   |   |   |      |   |   |   |      |   |   |
| Net sales                                                              |   | $      | 422,371   |   |   | $      | 462,548   |   |   | $ | 423,429 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Cost and expenses:                                                     |   |   |      |   |   |   |      |   |   |   |   |   |
| Cost of sales (exclusive of depreciation and amortization shown below) |   |   | 30,626    |   |   |   | 43,280    |   |   |   | 47,135 |   |
| Selling, general and administrative expenses                           |   |   | 339,138   |   |   |   | 377,310   |   |   |   | 326,568 |   |
| Depreciation and amortization                                          |   |   | 22,740    |   |   |   | 29,432    |   |   |   | 27,291 |   |
| Other charges and impairments                                          |   |   | 3,294     |   |   |   | 13,557    |   |   |   | 7,695 |   |
|                                                                   |   |   | 395,798   |   |   |   | 463,579   |   |   |   | 408,689 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Income (loss) from operations                                          |   |   | 26,573    |   |   |   | (1,031    | )      |   |   | 14,740 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Interest expense                                                       |   |   | 7,392     |   |   |   | 9,147     |   |   |   | 10,652 |   |
| Interest income                                                        |   |   | 456       |   |   |   | 620       |   |   |   | 1,834 |   |
| Other (expense) income, net                                            |   |   | (44       | )      |   |   | 190       |   |   |   | 175 |   |
| Income (loss) from operations before income tax expense (benefit)      |   |   | 19,593    |   |   |   | (9,368    | )      |   |   | 6,097 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Income tax expense (benefit)                                           |   |   | 5,796     |   |   |   | (2,644    | )      |   |   | 2,080 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net income (loss) from continuing operations                           |   |   | 13,797    |   |   |   | (6,724    | )      |   |   | 4,017 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net loss from discontinued operations, net of income tax benefit       |   |   | -         |   |   |   | (961      | )      |   |   | (441 | ) |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| NET INCOME (LOSS)                                                      |   | $      | 13,797    |   |   | $      | (7,685    | )      |   | $ | 3,576 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| NET INCOME (LOSS) PER COMMON SHARE                                     |   |   |      |   |   |   |      |   |   |   |   |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net income (loss) per share from continuing operations - diluted       |   | $      | 1.97      |   |   | $      | (1.03     | )      |   | $ | 0.63 |   |
| Net loss per share from discontinued operations - diluted              |   |   | -         |   |   |   | (0.15     | )      |   |   | (0.07 | ) |
| Net income (loss) per share - diluted                                  |   | $      | 1.97      |   |   | $      | (1.18     | )      |   | $ | 0.56 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net income (loss) per share from continuing operations - basic         |   | $      | 1.97      |   |   | $      | (1.03     | )      |   | $ | 0.63 |   |
| Net loss per share from discontinued operations - basic                |   |   | -         |   |   |   | (0.15     | )      |   |   | (0.07 | ) |
| Net income (loss) per share - basic                                    |   | $      | 1.97      |   |   | $      | (1.18     | )      |   | $ | 0.56 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Dividends per share                                                    |   | $      | 0.64      |   |   | $      | 0.64      |   |   | $ | 0.64 |   |
|                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Weighted average number of common and common equivalent                |   |   |      |   |   |   |      |   |   |   |   |   |
| shares outstanding-diluted                                             |   |   | 7,019,981 |   |   |   | 6,509,840 |   |   |   | 6,415,706 |   |
| Weighted average number of common and common equivalent                |   |   |      |   |   |   |      |   |   |   |   |   |
| shares outstanding-basic                                               |   |   | 6,992,511 |   |   |   | 6,509,840 |   |   |   | 6,390,961 |   |

Consolidated

| in thousands, except share and per share data                                    |   |   |    |   |       |   |    |     |   |   | Accumulated   |   |   |     |    |    |   |   |
|----------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|---------|----------|--------|--------|---------------|--------|--------|----------|---------|---------|--------|--------|
|                                                                             |   |   |    |   | Additional |   |    |     |   |   | other         |   |   | Treasury |    |    |   |   |
|                                                                             |   | Common |    |   | paid-in    |   |    | Retained |   |   | comprehensive |   |   | stock,   |    |    |   |   |
|                                                                             |   | stock  |    |   | capital    |   |    | earnings |   |   | (loss) income |   |   | at cost  |    |    | Total  |   |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |
| Balance at February 3, 2007                                                      |   | $      | 6,790   |   |       | $      | 52,421  |     |   | $      | 196,032       |   |   | $        | (9,387  | )       |   | $      | (233,057 | ) |   | $ | 12,799 |   |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Net income                                                                       |   |   | -       |   |       |   | -       |     |   |   | 3,576         |   |   |     | -       |    |   |   | - |   |   |   | 3,576 |   |
| Total other comprehensive income, net of tax effect                              |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | 2,662   |    |   |   | - |   |   |   | 2,662 |   |
| (consisting primarily of foreign exchange impact)                                |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Total comprehensive income                                                       |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | - |   |   |   | 6,238 |   |
| Surrender of employee shares for taxes                                           |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | (551 | ) |   |   | (551 | ) |
| Issuance of common stock and restricted stock awards,                            |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |
| net of forfeitures (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   |   |       | $      | 54,783  |     |   | $      | 195,524       |   |   | $        | (6,725  | )       |   | $      | (233,419 | ) |   | $ | 16,974 |   |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Net loss                                                                         |   |   | -       |   |       |   | -       |     |   |   | (7,685        | )      |   |     | -       |    |   |   | - |   |   |   | (7,685 | ) |
| Total other comprehensive loss, net of tax effect                                |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | (6,389  | )       |   |   | - |   |   |   | (6,389 | ) |
| (consisting primarily of foreign exchange impact)                                |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Total comprehensive loss                                                         |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | - |   |   |   | (14,074 | ) |
| Surrender of employee shares for taxes                                           |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | (175 | ) |   |   | (175 | ) |
| Issuance of common stock and restricted stock awards,                            |   |   | 25      |   |       |   | (229    | )        |   |   | -             |   |   |     | -       |    |   |   | 1,590 |   |   |   | 1,386 |   |
| net of forfeitures (419,478 shares)                                              |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| 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   |   |       | $      | 55,413  |     |   | $      | 183,704       |   |   | $        | (13,114 | )       |   | $      | (232,004 | ) |   | $ | 835 |   |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Net income                                                                       |   |   | -       |   |       |   | -       |     |   |   | 13,797        |   |   |     | -       |    |   |   | - |   |   |   | 13,797 |   |
| Total other comprehensive loss, net of tax effect                                |   |   |  - |   |       |   | -       |     |   |   | -             |   |   |     | (1,773  | )  |   |   | - |   |   |   | (1,773 | )  |
| (consisting primarily of defined benefit plan impact)                            |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Total comprehensive income                                                       |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | - |   |   |   | 12,024 |   |
| Surrender of employee shares for taxes                                           |   |   | -       |   |       |   | -       |     |   |   | -             |   |   |     | -       |    |   |   | (30 | ) |   |   | (30 | ) |
| Retirement of treasury stock (8,000,000 shares, at average cost)                 |   |   | (3,200  | )      |       |   | (25,940 | )        |   |   | (151,526      | )      |   |     | -       |    |   |   | 180,666 |   |   |   | - |   |
| Issuance of common stock and restricted stock awards,                            |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| net of forfeitures (193,292 shares)                                              |   |   | 38      |   |       |   | (1,673  | )        |   |   | -             |   |   |     | -       |    |   |   | 2,236 |   |   |   | 601 |   |
| Stock-based compensation recognized                                              |   |   | -       |   |       |   | 1,092   |     |   |   | -             |   |   |     | -       |    |   |   | - |   |   |   | 1,092 |   |
| Increased tax benefit related to stock-based compensation                        |   |   | -       |   |       |   | 125     |     |   |   | -             |   |   |     | -       |    |   |   | - |   |   |   | 125 |   |
| Dividends ($0.64 per common share)                                               |   |   | -       |   |       |   | -       |     |   |   | (4,459        | )      |   |     | -       |    |   |   | - |   |   |   | (4,459 | ) |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |
| Balance at February 6, 2010                                                      |   | $      | 3,674   |   |       | $      | 29,017  |     |   | $      | 41,516        |   |   | $        | (14,887 | )       |   | $      | (49,132 | ) |   | $ | 10,188 |   |
|                                                                             |   |   |    |   |       |   |    |     |   |   |          |   |   |     |    |    |   |   |   |   |   |   |   |   |

Consolidated 

| in thousands                                                                                  |   | 2009   |   |    | 2008   |   |   | 2007   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
|                                                                                          |   |   |   |    |   |   |   |   |   |
| Reconciliation of net income (loss) to cash flows provided by (used in) operating activities: |   |   |   |    |   |   |   |   |   |
|                                                                                          |   |   |   |    |   |   |   |   |   |
| Net income (loss)                                                                             |   | $      | 13,797 |    |   | $      | (7,685 | )      |   | $ | 3,576 |   |
|                                                                                          |   |   |   |    |   |   |   |   |   |   |   |   |
| Adjustments for items not requiring (providing) cash:                                         |   |   |   |    |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                 |   |   | 22,740 |    |   |   | 29,432 |   |   |   | 27,291 |   |
| Loss from discontinued operations                                                             |   |   | -      |    |   |   | 961    |   |   |   | 441 |   |
| Amortization of prepaid debt fees                                                             |   |   | 968    |    |   |   | 678    |   |   |   | 616 |   |
| Stock-based compensation expense                                                              |   |   | 1,092  |    |   |   | 1,037  |   |   |   | 2,724 |   |
| Issuance of common stock to Sears                                                             |   |   | -      |    |   |   | 865    |   |   |   | - |   |
| Gain on sale of assets held for sale, net                                                     |   |   | (619   | )       |   |   | -      |   |   |   | - |   |
| Loss on impairment of property and equipment                                                  |   |   | 300    |    |   |   | 739    |   |   |   | - |   |
| Loss on disposition of property and equipment                                                 |   |   | 580    |    |   |   | 1,387  |   |   |   | 319 |   |
| Deferred income tax provision                                                                 |   |   | 6,195  |    |   |   | (2,550 | )      |   |   | 1,455 |   |
| Change in interest rate swap                                                                  |   |   | (1,514 | )       |   |   | 617    |   |   |   | 2,930 |   |
| Pension, supplemental retirement plan and profit sharing expense                              |   |   | 870    |    |   |   | 505    |   |   |   | 2,009 |   |
| Other                                                                                         |   |   | 38     |    |   |   | -      |   |   |   | 67 |   |
|                                                                                          |   |   |   |    |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash flow from operating assets and liabilities:                       |   |   |   |    |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                           |   |   | 213    |    |   |   | 4,523  |   |   |   | (1,987 | ) |
| Inventories                                                                                   |   |   | 1,201  |    |   |   | 5,448  |   |   |   | 2,000 |   |
| Prepaid expenses and other current assets                                                     |   |   | 310    |    |   |   | (1,238 | )      |   |   | 652 |   |
| Accounts payable                                                                              |   |   | (2,439 | )       |   |   | (5,153 | )      |   |   | 6,020 |   |
| Contribution to pension plan                                                                  |   |   | (1,560 | )       |   |   | (3,157 | )      |   |   | (5,050 | ) |
| Supplemental retirement plan payments                                                         |   |   | (141   | )       |   |   | (1,283 | )      |   |   | (249 | ) |
| Accrued expenses and other liabilities                                                        |   |   | (8,584 | )       |   |   | (4,227 | )      |   |   | (7,021 | ) |
| Income taxes payable                                                                          |   |   | (992   | )       |   |   | (708   | )      |   |   | (1,001 | ) |
| Deferred revenues and related costs                                                           |   |   | (1,076 | )       |   |   | (7,720 | )      |   |   | 2,655 |   |
| Other                                                                                         |   |   | (90    | )  |   |   | 192    |   |   |   | 2,425 |   |
|                                                                                          |   |   |   |    |   |   |   |   |   |   |   |   |
| Cash flows provided by continuing operations                                                  |   |   | 31,289 |    |   |   | 12,663 |   |   |   | 39,872 |   |
| Cash flows used in discontinued operations                                                    |   |   | -      |    |   |   | (816   | )      |   |   | (406 | ) |
| Cash flows provided by operating activities                                                   |   | $      | 31,289 |    |   | $      | 11,847 |   |   | $ | 39,466 |   |
|                                                                                          |   |   |   |    |   |   |   |   |   |   |   |   |

| in thousands                                                                |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                        |   |   |    |   |   |   |    |   |   |
| Cash flows provided by operating activities                                 |   |   | 31,289  |   |   |   | 11,847  |   |   |   | 39,466 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash flows (used in) provided by financing activities:                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Repayment of long-term debt                                                 |   |   | (28,187 | )      |   |   | (8,697  | )      |   |   | (17,241 | ) |
| Proceeds from long-term borrowings                                          |   |   | -       |   |   |   | -       |   |   |   | 115,000 |   |
| Payment of debt issuance costs                                              |   |   | (943    | )      |   |   | -       |   |   |   | (2,737 | ) |
| Restricted cash - release compensating balance under Credit Agreement       |   |   | -       |   |   |   | -       |   |   |   | 1,000 |   |
| Cash dividends                                                              |   |   | (4,459  | )      |   |   | (4,135  | )      |   |   | (4,084 | ) |
| Surrender of employee shares for taxes                                      |   |   | (30     | )      |   |   | (175    | )      |   |   | (551 | ) |
| Tax benefit (deficiency) excess from stock-based compensation               |   |   | 125     |   |   |   | (178    | )      |   |   | (599 | ) |
| Other                                                                       |   |   | -       |   |   |   | (234    | )      |   |   | - |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash flows (used in) provided by financing activities                       |   |   | (33,494 | )      |   |   | (13,419 | )      |   |   | 90,788 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| 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                                         |   |   | (5,234  | )      |   |   | (36,074 | )      |   |   | (14,884 | ) |
| Proceceds from sale of assets held for sale                                 |   |   | 1,902   |   |   |   | -       |   |   |   | - |   |
| Proceeds from sale of property and equipment                                |   |   | 343     |   |   |   | 106     |   |   |   | - |   |
| Proceeds from Rabbi Trust used for supplemental retirement plan payments    |   |   | 153     |   |   |   | 1,295   |   |   |   | 262 |   |
| Distribution of Rabbi Trust funds in excess of related obligations          |   |   | -       |   |   |   | 1,311   |   |   |   | - |   |
| Other                                                                       |   |   | (40     | )      |   |   | (74     | )      |   |   | (21 | ) |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash flows used in investing activities                                     |   |   | (2,876  | )      |   |   | (33,488 | )      |   |   | (97,653 | ) |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                |   |   | 329     |   |   |   | (452    | )      |   |   | 282 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                        |   |   | (4,752  | )      |   |   | (35,512 | )      |   |   | 32,883 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                              |   |   | 23,665  |   |   |   | 59,177  |   |   |   | 26,294 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash and cash equivalents at end of year                                    |   | $      | 18,913  |   |   | $      | 23,665  |   |   | $ | 59,177 |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |

| in thousands                                                              |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                      |   |   |   |   |   |   |   |   |   |
| Supplemental cash flow information:                                       |   |   |   |   |   |   |   |   |   |
| Interest paid                                                             |   | $      | 7,481  |   |   | $      | 7,969  |   |   | $ | 6,509 |   |
| Income taxes paid, net                                                    |   | $      | 469    |   |   | $      | 228    |   |   | $ | 2,082 |   |
| Supplemental non-cash financing activities:                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of treasury stock under the Employee Profit Sharing Plan         |   | $      | 594    |   |   | $      | 521    |   |   | $ | 442 |   |
| Issuance of restricted stock and stock options to employees and directors |   | $      | 850    |   |   | $      | 876    |   |   | $ | 2,690 |   |
| Issuance of common stock to Sears                                         |   | $      | -      |   |   | $      | 865    |   |   | $ | - |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |

Notes

| Fiscal year |   | Ended            |   | Weeks |
|-------------|--------|------------------|--------|-------|
| 2009        |   | February 6, 2010 |   | 52    |
| 2008        |   | February 7, 2009 |   | 53    |
| 2007        |   | February 2, 2008 |   | 52    |

| Buildings 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 the model. |

|                   |   | Fair Value Measurements |   |
|------------------------|--------|-------------------------|--------|
|                   |   | Level 1                 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Liabilities            |   |                    |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap (1) |   | $                       | -      |   |   | $ | 2.0 |   |   | $ | - |   |   | $ | 2.0 |   |

|                                                                (1) | The total fair value of the interest rate swap is included in Accrued expenses and other liabilities as of February 6, 2010.  This financial instrument was valued using the “income approach” valuation technique.  This method used valuation techniques to convert future amounts to a single present amount.  The measurement was based on the value indicated by current market expectations about those future amounts.  The Company uses its interest rate swap as a means of managing interest rates on its outstanding fixed-rate debt obligations.  Accordingly, the fair market value is estimated to approximate the recorded value of this instrument.  The fair value of the interest rate swap at February 6, 2010, and February 7, 2009, was $2.0 million and $3.5 million, respectively. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |   | 2007   |    |
|-------------------------------|--------|--------|---------|
|                          |   |   |    |
| Revenue                       |   | $      | 506,808 |   |
|                          |   |   |    |   |
| Net loss                      |   | $      | (18,124 | ) |
|                          |   |   |    |   |
| Basic loss per common share   |   | $      | (2.84   | ) |
|                          |   |   |    |   |
| Diluted loss per common share |   | $      | (2.84   | ) |

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

| in thousands                              |   | February 6, 2010 |   |   | February 7, 2009 |   |
|-------------------------------------------|--------|------------------|--------|--------|------------------|--------|
|                                      |   |             |   |   |             |   |
| Raw materials - film, paper and chemicals |   | $                | 2,181  |   |             | $      | 2,724 |   |
| Portraits in process                      |   |             | 1,138  |   |             |   | 1,313 |   |
| Finished portraits pending delivery       |   |             | 91     |   |             |   | 261 |   |
| Frames and accessories                    |   |             | 258    |   |             |   | 426 |   |
| Studio supplies                           |   |             | 2,840  |   |             |   | 2,495 |   |
| Equipment repair parts and supplies       |   |             | 650    |   |             |   | 878 |   |
| Other                                     |   |             | 307    |   |             |   | 392 |   |
|                                      |   |             |   |   |             |   |   |   |
| Total                                     |   | $                | 7,465  |   |             | $      | 8,489 |   |
|                                      |   |             |   |   |             |   |   |   |

| in thousands                        |   | February 6, 2010 |   |   | February 7, 2009 |   |
|-------------------------------------|--------|------------------|--------|--------|------------------|--------|
|                                |   |             |   |   |             |   |
| Land                                |   | $                | 2,203  |   |             | $      | 1,473 |   |
| Buildings and building improvements |   |             | 4,135  |   |             |   | 5,142 |   |
|                                |   |             |   |   |             |   |   |   |
| Assets held for sale                |   | $                | 6,338  |   |             | $      | 6,615 |   |
|                                |   |             |   |   |             |   |   |   |

|                                   |   | 2009   |   |   | 2008   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance, beginning of year             |   | $      | 21,459 |   |   | $      | 18,049 |   |
| Purchase accounting entries            |   |   | -      |   |   |   | 3,889 |   |
| Translation impact on foreign balances |   |   | 261    |   |   |   | (479 | ) |
| Balance, end of year                   |   | $      | 21,720 |   |   | $      | 21,459 |   |
|                                   |   |   |   |   |   |   |   |   |

| 2009                    |   |
|-------------------------|--------|
|                    |   |   |   |   |   |   |   | Translation |   |   |   |   |
|                    |   |   |   |   |   |   |   | Impact of |   |   |   |   |
|                    |   |   |   |   | Accumulated |   |   | Foreign |   |   |   |   |
|                    |   | Gross Amount |   |   | Amortization |   |   | Balances |   |   | Net Balance |   |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquired host agreement |   | $ | 39,398 |   |   | $ | (2,019 | ) |   | $ | 859 |   |   | $ | 38,238 |   |
| Acquired customer list  |   |   | 808 |   |   |   | (401 | ) |   |   | 15 |   |   |   | 422 |   |
|                    |   | $ | 40,206 |   |   | $ | (2,420 | ) |   | $ | 874 |   |   | $ | 38,660 |   |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 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 |   |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 2010 |   | $2,239 |
|------|--------|--------|
| 2011 |   | $2,139 |
| 2012 |   | $2,086 |
| 2013 |   | $2,089 |
| 2014 |   | $2,033 |

| in thousands                              |   | February 6, 2010 |   |   | February 7, 2009 |   |
|-------------------------------------------|--------|------------------|--------|--------|------------------|--------|
|                                      |   |             |   |   |             |   |
| Term loan portion of the Credit Agreement |   | $                | 77,541 |   |             | $      | 105,728 |   |
| Less: current maturities                  |   |             | 19,686 |   |             |   | 1,150 |   |
|                                      |   | $                | 57,855 |   |             | $      | 104,578 |   |
|                                      |   |             |   |   |             |   |   |   |

| in thousands |   |   |   |
|--------------|--------|--------|--------|
|         |   |   |   |
| 2010         |   |   | 19,686 |   |
| 2011         |   |   | 10,000 |   |
| 2012         |   |   | 47,855 |   |
|         |   | $      | 77,541 |   |
|         |   |   |   |   |

| in thousands                             |   | 2009   |   |   | 2008   |   |    | 2007   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|                                     |   |   |   |   |   |   |    |   |   |
| Net income (loss)                        |   | $      | 13,797 |   |   | $      | (7,685  | )      |   | $ | 3,576 |   |
| Other comprehensive (loss) income:       |   |   |   |   |   |   |    |   |   |   |   |   |
| Foreign currency translation adjustments |   |   | 2,451  |   |   |   | (4,976  | )      |   |   | 2,510 |   |
| Defined benefit plans (1)                |   |   | (4,224 | )      |   |   | (1,413  | )      |   |   | 152 |   |
| Total other comprehensive (loss) income  |   |   | (1,773 | )      |   |   | (6,389  | )      |   |   | 2,662 |   |
|                                     |   |   |   |   |   |   |    |   |   |   |   |   |
| Total comprehensive income (loss)        |   | $      | 12,024 |   |   | $      | (14,074 | )      |   | $ | 6,238 |   |
|                                     |   |   |   |   |   |   |    |   |   |   |   |   |

| in thousands                                       |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|----------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                               |   |   |    |   |   |   |    |   |   |
| Foreign currency translation adjustments           |   | $      | (917    | )      |   | $      | (3,368  | )      |   | $ | 1,608 |   |
| Unfunded projected benefit obligation, net of tax: |   |   |    |   |   |   |    |   |   |   |   |   |
|   Prior service cost                          |   |   | -       |   |   |   | -       |   |   |   | (131 | ) |
|    Unamortized net actuarial losses      |   |   | (13,970 | )      |   |   | (9,746  | )      |   |   | (8,202 | ) |
| Accumulated other comprehensive loss               |   | $      | (14,887 | )      |   | $      | (13,114 | )      |   | $ | (6,725 | ) |
|                                               |   |   |    |   |   |   |    |   |   |   |   |   |

| in thousands                                                           |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                   |   |   |   |   |   |   |   |   |   |
| Reserves for severance and related costs                               |   | $      | 970    |   |   | $      | 2,046  |   |   | $ | 2,035 |   |
| Proxy contest fees                                                     |   |   | 871    |   |   |   | -      |   |   |   | - |   |
| Other transition related costs - PCA Acquisition                       |   |   | 527    |   |   |   | 1,255  |   |   |   | 2,817 |   |
| Impairment charges                                                     |   |   | 300    |   |   |   | 739    |   |   |   | - |   |
| Sears fees related to the settlement of the previous license agreement |   |   | -      |   |   |   | 7,527  |   |   |   | 2,500 |   |
| Other                                                                  |   |   | 626    |   |   |   | 1,990  |   |   |   | 343 |   |
|                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Other Charges and Impairments                                    |   | $      | 3,294  |   |   | $      | 13,557 |   |   | $ | 7,695 |   |
|                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                                                           |   |         |   |   |      |   |   | Asset       |   |   |     |   |   |         |   |
|------------------------------------------------------------------------|--------|--------------|--------|--------|-----------|--------|--------|-------------|--------|--------|----------|--------|--------|--------------|--------|
|                                                                   |   | Reserve      |   |   | 2009      |   |   | Write-      |   |   |     |   |   | Reserve      |   |
|                                                                   |   | Balance      |   |   | Charges   |   |   | Downs/      |   |   | Cash     |   |   | Balance      |   |
|                                                                   |   | Feb. 7, 2009 |   |   | (Credits) |   |   | Impairments |   |   | Payments |   |   | Feb. 6, 2010 |   |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |   |
| Sears fees related to the settlement of the previous license agreement |   | $            | 2,218  |   |      | $      | -      |        |   | $      | -        |   |   | $            | (1,650 | ) |   | $ | 568 |   |
| Reserves for severance and related costs                               |   |         | 1,184  |   |      |   | 970    |        |   |   | -        |   |   |         | (1,553 | ) |   |   | 601 |   |
| Proxy contest fees                                                     |   |         | -      |   |      |   | 871    |        |   |   | -        |   |   |         | (727   | ) |   |   | 144 |   |
| Other transition related costs - PCA acquisition                       |   |         | 18     |   |      |   | 527    |        |   |   | (403     | )      |   |         | (108   | ) |   |   | 34 |   |
| Impairment charges                                                     |   |         | -      |   |      |   | 300    |        |   |   | (300     | )      |   |         | -      |   |   |   | - |   |
| Other                                                                  |   |         | 1,258  |   |      |   | 626    |        |   |   | (92      | )      |   |         | (1,542 | ) |   |   | 250 |   |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |   |   |   |   |   |   |
| Total                                                                  |   | $            | 4,678  |   |      | $      | 3,294  |        |   | $      | (795     | )      |   | $            | (5,580 | ) |   | $ | 1,597 |   |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |   |   |   |   |   |   |

| in thousands                                                           |   |         |   |   |      |   |   | Asset       |   |   |     |   |   |         |    |
|------------------------------------------------------------------------|--------|--------------|--------|--------|-----------|--------|--------|-------------|--------|--------|----------|--------|--------|--------------|---------|
|                                                                   |   | Reserve      |   |   | 2008      |   |   | Write-      |   |   |     |   |   | Reserve      |    |
|                                                                   |   | Balance      |   |   | Charges   |   |   | Downs/      |   |   | Cash     |   |   | Balance      |    |
|                                                                   |   | Feb. 2, 2008 |   |   | (Credits) |   |   | Impairments |   |   | Payments |   |   | Feb. 7, 2009 |    |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |    |
| Sears fees related to the settlement of the previous license agreement |   | $            | 2,500  |   |      | $      | 7,527  |        |   | $      | -        |   |   | $            | (7,809  | ) |   | $ | 2,218 |   |
| Reserves for severance and related costs                               |   |         | 1,575  |   |      |   | 2,046  |        |   |   | -        |   |   |         | (2,437  | ) |   |   | 1,184 |   |
| Other transition related costs - PCA Acquisition                       |   |         | 472    |   |      |   | 1,255  |        |   |   | -        |   |   |         | (1,709  | ) |   |   | 18 |   |
| Impairment charges                                                     |   |         | -      |   |      |   | 739    |        |   |   | (739     | )      |   |         | -       |   |   |   | - |   |
| Other                                                                  |   |         | 744    |   |      |   | 1,990  |        |   |   | -        |   |   |         | (1,476  | ) |   |   | 1,258 |   |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |    |   |   |   |   |   |
| Total                                                                  |   | $            | 5,291  |   |      | $      | 13,557 |        |   | $      | (739     | )      |   | $            | (13,431 | ) |   | $ | 4,678 |   |
|                                                                   |   |         |   |   |      |   |   |        |   |   |     |   |   |         |    |   |   |   |   |   |

|                                                                                                                                                                 |   | 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 |   |                                   7.18 |   |  $                                   13.04 |   |                                        - |   |  $                                    - |
|                                                                                                                                                                 |   |                                                                                                                                                                            |   |   |   |   |   |   |   |   |
|                                                                                                                                                                 |   |                                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Total                                                                                                                                                                |   |                             217,500 |   |                                   7.18 |   |  $                                   13.04 |   |                                        - |   |  $                                    - |
|                                                                                                                                                                 |   |                                                                                                                                                                            |   |   |   |   |   |   |   |   |

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

|                                                                                                                                                                                                                                                               |   | Options Outstanding and Exercisable                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                               |   |                                                                                                                                            |   | Weighted-Average |   |   |
|                                                                                                                                                                                                                                                               |   | Number of  Shares                                                                                                                     |   | Remaining Contractual |   | Weighted-Average |
| Exercise Prices                                                                                                                                                                                                                                                    |   | Outstanding                                                                                                                                     |   | Life (Years) |   | Exercise Price |
|                                                                                                                                                                                                                                                               |   |                                                                                                                                            |   |   |   |   |
|  $                                         12.96 |   |                      10,046            |   |                                  0.70 |   | $                                            12.96 |
|  $                                         17.00      |   |                        5,000 |   |                                  0.19 |   | $                                            17.00 |
|                                                                                                                                                                                                                                                               |   |                                                                                                                                            |   |   |   |   |
| Total                                                                                                                                                                                                                                                              |   |                      15,046            |   |                                  0.53 |   | $                                            14.30 |
|                                                                                                                                                                                                                                                               |   |                                                                                                                                            |   |   |   |   |

|                                                             |   | 2009   |    |   | 2008                              |   |   | 2007   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|-----------------------------------|--------|--------|--------|--------|
|                                                             |   | Shares |    |   | Weighted-Average Grant-Date Value |   |   | Shares |   |   | Weighted-Average Grant-Date Value |   |   | Shares |   |   | Weighted-Average Grant-Date Value |   |
| Nonvested stock, beginning of year                               |   |   | 1,056   |   |                              | $      | 18.95  |   |   |   | 1,584 |   |   | $ | 18.95 |   |   |   | 4,448 |   |   | $ | 17.99 |   |
| Granted                                                          |   |   | 97,142  |   |                              |   | 9.11   |   |   |   | 57,082 |   |   |   | 15.76 |   |   |   | 53,250 |   |   |   | 50.52 |   |
| Vested                                                           |   |   | (92,418 | )      |                              |   | 9.30   |   |   |   | (53,811 | ) |   |   | 15.79 |   |   |   | (55,836 | ) |   |   | 48.81 |   |
| Forfeited                                                        |   |   | (5,252  | )      |                              |   | 6.70   |   |   |   | (3,799 | ) |   |   | 15.80 |   |   |   | (278 | ) |   |   | 54.00 |   |
| Nonvested stock, end of year                                     |   |   | 528     |   |                              | $      | 18.95  |   |   |   | 1,056 |   |   | $ | 18.95 |   |   |   | 1,584 |   |   | $ | 18.95 |   |
|                                                             |   |   |    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based compensation expense related to nonvested stock |   | $      | 896,000 |   |                              |   |   |   |   | $ | 850,000 |   |   |   |   |   |   | $ | 2,724,000 |   |   |   |   |   |
|                                                             |   |   |    |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                                  |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                          |   |   |   |   |   |   |   |   |   |
| Profit sharing                                |   | $      | 734    |   |   | $      | 590    |   |   | $ | 526 |   |
| Pension plan expense                          |   |   | 203    |   |   |   | 818    |   |   |   | 1,202 |   |
| Supplemental retirement plan (income) expense |   |   | (67    | )      |   |   | (903   | )      |   |   | 281 |   |
| Total expense, net                            |   | $      | 870    |   |   | $      | 505    |   |   | $ | 2,009 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands |   | Pension Plan |   |   | Supplemental Retirement |   |
|--------------|--------|--------------|--------|--------|-------------------------|--------|
|         |   | Benefits     |   |   | Plan Benefits           |   |
|         |   |         |   |   |                    |   |
| 2010         |   | $            | 2,110  |   |                    | $      | 74 |   |
| 2011         |   |         | 2,210  |   |                    |   | 68 |   |
| 2012         |   |         | 2,300  |   |                    |   | 110 |   |
| 2013         |   |         | 2,380  |   |                    |   | 110 |   |
| 2014         |   |         | 2,510  |   |                    |   | 110 |   |
| 2015 - 2020  |   |         | 15,190 |   |                    |   | 621 |   |

|                                        |   | Defined Benefit Plans |    |
|---------------------------------------------|--------|-----------------------|---------|
|                                        |   | Pension Plan          |    |   | Supplemental Retirement Plan |   |
| in thousands                                |   | 2009                  |    |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |
| Projected benefit obligation                |   |                  |    |   |   |   |   |   |   |   |   |   |
| Benefit obligation at beginning of year     |   | $                     | 42,863  |   |   | $ | 50,245 |   |   | $ | 1,201 |   |   | $ | 3,617 |   |
|   Service cost                         |   |                  | -       |   |   |   | 279 |   |   |   | - |   |   |   | 71 |   |
| Interest cost                               |   |                  | 3,090   |   |   |   | 2,983 |   |   |   | 85 |   |   |   | 212 |   |
| Actuarial loss (gain)                       |   |                  | 8,750   |   |   |   | (8,184 | ) |   |   | 206 |   |   |   | (461 | ) |
| Benefit payments                            |   |                  | (2,071  | ) |   |   | (2,168 | ) |   |   | (141 | ) |   |   | (1,322 | ) |
| Plan amendments (1)                         |   |                  | -       |   |   |   | (292 | ) |   |   | - |   |   |   | (916 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit obligation at end of year           |   | $                     | 52,632  |   |   | $ | 42,863 |   |   | $ | 1,351 |   |   | $ | 1,201 |   |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets                   |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value at beginning of year             |   | $                     | 30,252  |   |   | $ | 37,857 |   |   | $ | - |   |   | $ | - |   |
| Actual return (loss) on plan assets         |   |                  | 5,168   |   |   |   | (8,864 | ) |   |   | - |   |   |   | - |   |
| Employer contributions (2)                  |   |                  | 1,560   |   |   |   | 3,157 |   |   |   | 141 |   |   |   | 1,322 |   |
| Benefit payments                            |   |                  | (2,071  | ) |   |   | (2,168 | ) |   |   | (141 | ) |   |   | (1,322 | ) |
| Plan amendments (3)                         |   |                  | -       |   |   |   | 270 |   |   |   | - |   |   |   | - |   |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value at end of year                   |   | $                     | 34,909  |   |   | $ | 30,252 |   |   | $ | - |   |   | $ | - |   |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Funded status                               |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Funded status at end of year                |   | $                     | (17,724 | ) |   | $ | (12,611 | ) |   | $ | (1,351 | ) |   | $ | (1,201 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrecognized net loss (gain)                |   |                  | 22,915  |   |   |   | 16,445 |   |   |   | (368 | ) |   |   | (725 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net amount recognized                       |   | $                     | 5,191   |   |   | $ | 3,834 |   |   | $ | (1,719 | ) |   | $ | (1,926 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Components of consolidated balance sheet    |   |                  |    |   |   |   |   |   |   |
| Accrued benefit liability                   |   | $                     | (17,724 | ) |   | $ | (12,611 | ) |   | $ | (1,351 | ) |   | $ | (1,201 | ) |
| Accumulated other comprehensive loss (gain) |   |                  | 22,915  |   |   |   | 16,445 |   |   |   | (368 | ) |   |   | (725 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net amount recognized                       |   | $                     | 5,191   |   |   | $ | 3,834 |   |   | $ | (1,719 | ) |   | $ | (1,926 | ) |
|                                        |   |                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) |   | Plan amendments for the pension plan in 2008 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 in 2008 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) |   | For the supplemental retirement plan for the fiscal years ended February 6, 2010, and February 7, 2009, the employer contributions were financed through the liquidation of investments in the Company’s Rabbi Trust.                                                                                                                                                                                                                                                                                         |
| (3) |   | Plan amendment in 2008 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 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               |   |         | -      |   |            |   | -      |   |   |   | - |   |
| Recognition of net prior service cost in earnings                             |   |         | -      |   |            |   | -      |   |   |   | - |   |
| Unrealized losses on net prior service cost at February 6, 2010               |   | $            | -      |   |            | $      | -      |   |   | $ | - |   |
|                                                                          |   |         |   |   |            |   |   |   |   |   |   |   |
| Actuarial (Gain) Loss, net of tax:                                            |   |         |   |   |            |   |   |   |   |   |   |   |
| Unrealized losses (gains) on net actuarial (gain)/loss at February 2, 2008    |   | $            | 8,610  |   |            | $      | (408   | )      |   | $ | 8,202 |   |
| Net actuarial losses (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 |   |
| Net actuarial losses (gains) recorded in accumulated other comprehensive loss |   |         | 4,169  |   |            |   | 119    |   |   |   | 4,288 |   |
| Recognition of net actuarial (losses)/gains in earnings                       |   |         | (158   | )      |            |   | 94     |   |   |   | (64 | ) |
| Unrealized losses (gains) on net actuarial (gain)/loss at February 6, 2010    |   | $            | 14,207 |   |            | $      | (237   | )      |   | $ | 13,970 |   |
|                                                                          |   |         |   |   |            |   |   |   |   |   |   |   |

| in thousands                              |   | Pension Plan |   |   | Supplemental Retirement Plan |   |
|-------------------------------------------|--------|--------------|--------|--------|------------------------------|--------|
|                                      |   | 2009         |   |   | 2008                         |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                      |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Components of net periodic benefit cost   |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                              |   | $            | -      |   |                         | $      | 279 |   |   | $ | 279 |   |   | $ | - |   |   | $ | 71 |   |   | $ | 77 |   |
| Interest cost                             |   |         | 3,090  |   |                         |   | 2,983 |   |   |   | 2,936 |   |   |   | 85 |   |   |   | 212 |   |   |   | 206 |   |
|   Expected return on plan assets     |   |         | (3,143 | )      |                         |   | (3,242 | ) |   |   | (2,924 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
|   Amortization of prior service cost |   |         | -      |   |                         |   | 44 |   |   |   | 44 |   |   |   | - |   |   |   | 31 |   |   |   | 31 |   |
|  Amortization of net loss (gain)     |   |         | 256    |   |                         |   | 710 |   |   |   | 867 |   |   |   | (152 | ) |   |   | (59 | ) |   |   | (33 | ) |
|  Curtailment expense (income)        |   |         | -      |   |                         |   | 44 |   |   |   | - |   |   |   | - |   |   |   | (469 | ) |   |   | - |   |
|  Net gain due to settlements         |   |         | -      |   |                         |   | - |   |   |   | - |   |   |   | - |   |   |   | (689 | ) |   |   | - |   |
|                                      |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net periodic benefit cost                 |   | $            | 203    |   |                         | $      | 818 |   |   | $ | 1,202 |   |   | $ | (67 | ) |   | $ | (903 | ) |   | $ | 281 |   |
|                                      |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                              |   | Pension Plan |   |   | Supplemental Retirement Plan |   |
|-------------------------------------------------------------------|--------|--------------|--------|--------|------------------------------|--------|
|                                                              |   | 2009         |   |   | 2008                         |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Weighted-average assumptions used to determine                    |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| benefit obligations at fiscal year end:                           |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                                     |   |         | 6.01   | %      |                         |   | 7.25 | % |   |   | 6.00 | % |   |   | 6.01 | % |   |   | 7.25 | % |   |   | 6.00 | % |
|      Rate of increase in future compensation  |   |         | N/A    |   |                         |   | 3.00 | % |   |   | 3.00 | % |   |   | N/A |   |   |   | 2.00 | % |   |   | 2.00 | % |
| Weighted-average assumptions used to determine                    |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net periodic benefit cost:                                        |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                                     |   |         | 7.25   | %      |                         |   | 6.00 | % |   |   | 5.75 | % |   |   | 7.25 | % |   |   | 6.00 | % |   |   | 5.75 | % |
|      Expected long-term return on plan assets |   |         | 7.75   | %      |                         |   | 8.25 | % |   |   | 8.25 | % |   |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
|      Rate of increase in future compensation  |   |         | N/A    |   |                         |   | 3.00 | % |   |   | 3.00 | % |   |   | N/A |   |   |   | 2.00 | % |   |   | 2.00 | % |
|                                                              |   |         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                   |   | Pension Plan |   |   | Supplemental Retirement Plan |   |
|--------------------------------|--------|--------------|--------|--------|------------------------------|--------|
|                           |   | 2009         |   |   | 2008                         |   |   | 2009 |   |   | 2008 |   |
|                           |   |         |   |   |                         |   |   |   |   |   |   |   |
| Projected benefit obligation   |   | $            | 52,632 |   |                         | $      | 42,863 |   |   | $ | 1,351 |   |   | $ | 1,201 |   |
| Accumulated benefit obligation |   |         | 52,632 |   |                         |   | 42,863 |   |   |   | 1,351 |   |   |   | 1,201 |   |
| Fair value of plan assets      |   |         | 34,909 |   |                         |   | 30,252 |   |   |   | - |   |   |   | - |   |

|                                 |   | Target     |   | Percentage of Plan Assets at |
|--------------------------------------|--------|------------|--------|------------------------------|
| Asset Class                          |   | Allocation |   | February 6, 2010             |   | February 7, 2009 |
| Equity securities                    |   | 50%        |   | 53%                          |   | 48% |
| Fixed income securities              |   | 45%        |   | 44%                          |   | 49% |
| Cash and cash equivalents            |   | 5%         |   | 3%                           |   | 3% |
|       Total |   | 100%       |   | 100%                         |   | 100% |
|                                 |   |       |   |                         |   |   |

| in thousands, except for share data   |   | Total  |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|---------------------------------------|--------|--------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
|                                  |   |   |   |   |    |   |   |    |   |   |    |   |
| Equity securities (1):                |   |   |   |   |    |   |   |    |   |   |    |   |
| U.S. large cap                        |   |   | 10,990 |   |    |   | 10,990 |    |   |   | -       |   |   |   | - |   |
| U.S. small cap (2)                    |   |   | 4,189  |   |    |   | 4,189  |    |   |   | -       |   |   |   | - |   |
| Non-U.S.                              |   |   | 3,560  |   |    |   | 3,560  |    |   |   | -       |   |   |   | - |   |
| Fixed income securities (3):          |   |   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |
| U.S. government and agency securities |   |   | 9,144  |   |    |   | -      |    |   |   | 9,144   |   |   |   | - |   |
| Corporate bonds and notes             |   |   | 4,841  |   |    |   | -      |    |   |   | 4,841   |   |   |   | - |   |
| Mortgage-backed securities            |   |   | 1,222  |   |    |   | -      |    |   |   | 1,222   |   |   |   | - |   |
| Cash and cash equivalents (4)         |   |   | 962    |   |    |   | 962    |    |   |   | -       |   |   |   | - |   |
|                                  |   |   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |
| Total                                 |   | $      | 34,908 |   |    | $      | 19,701 |    |   | $      | 15,207  |   |   | $ | - |   |
|                                  |   |   |   |   |    |   |   |    |   |   |    |   |   |   |   |   |

| (1)    |   | Investments in mutual funds and exchange-traded funds are valued using a market approach based on the net asset value per share multiplied by the number of shares held as of the measurement date.  Investments in common stock are valued using a market approach based on quoted market prices multiplied by the number of shares owned as of the measurement date. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                             |
| (2)    |   | U.S. small cap equity securities include 173,915 shares of CPI Corp. common stock.                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                             |
| (3)    |   | Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, reported trades and other observable inputs.  The corporate bonds and notes class represents investment grade securities of U.S. issuers from diverse industries.                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                             |
| (4)    |   | Cash and cash equivalents are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments.                                                                                                                                                                                               |

| thousands                             |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                  |   |   |   |   |   |   |   |   |   |
| Total income tax provision (benefit): |   |   |   |   |   |   |   |   |   |
| Continuing operations                 |   | $      | 5,796  |   |   | $      | (2,644 | )      |   | $ | 2,080 |   |
| Discontinued operations               |   |   | -      |   |   |   | (543   | )      |   |   | (129 | ) |
| Total income tax provision (benefit)  |   | $      | 5,796  |   |   | $      | (3,187 | )      |   | $ | 1,951 |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands |                                                            | 2009   |   |   | 2008   |   |   | 2007   |   |
|--------------|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|         |                                                            |   |   |   |   |   |   |   |   |   |
| Federal      |                                                            |   |   |   |   |   |   |   |   |   |
|         | Current                                                         |   | $      | (556   | )      |   | $      | (94    | )      |   | $ | (56 | ) |
|         | Deferred                                                        |   |   | 4,398  |   |   |   | (1,784 | )      |   |   | 254 |   |
|         | Federal income tax                                              |   |   | 3,842  |   |   |   | (1,878 | )      |   |   | 198 |   |
| State        |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|         | Current                                                         |   |   | 157    |   |   |   | -      |   |   |   | 681 |   |
|         | Deferred                                                        |   |   | 839    |   |   |   | (314   | )      |   |   | (368 | ) |
|         | State income tax                                                |   |   | 996    |   |   |   | (314   | )      |   |   | 313 |   |
| Foreign      |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|         | Current                                                         |   |   | -      |   |   |   | -      |   |   |   | - |   |
|         | Deferred                                                        |   |   | 958    |   |   |   | (452   | )      |   |   | 1,569 |   |
|         | Foreign income tax                                              |   |   | 958    |   |   |   | (452   | )      |   |   | 1,569 |   |
|         |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|         | Total income tax provision (benefit) from continuing operations |   | $      | 5,796  |   |   | $      | (2,644 | )      |   | $ | 2,080 |   |
|         |                                                            |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                                |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                        |   |   |   |   |   |   |   |   |   |
| Tax at statutory rate (34%)                 |   | $      | 6,662  |   |   | $      | (3,184 | )      |   | $ | 2,073 |   |
| State income tax, at statutory rate, net of |   |   |   |   |   |   |   |   |   |   |   |   |
| federal income tax expense (benefit)        |   |   | 657    |   |   |   | (207   | )      |   |   | 244 |   |
| Tax effect of:                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses not deductible                     |   |   | 229    |   |   |   | 370    |   |   |   | 249 |   |
| Tax credits and exclusions                  |   |   | (2,814 | )      |   |   | (798   | )      |   |   | (691 | ) |
| Valuation allowance                         |   |   | 109    |   |   |   | 726    |   |   |   | 457 |   |
| Foreign taxes                               |   |   | 74     |   |   |   | 248    |   |   |   | 385 |   |
| Tax true-ups and other                      |   |   | 879    |   |   |   | 223    |   |   |   | (620 | ) |
| US tax benefit of foreign tax deduction     |   |   | -      |   |   |   | (22    | )      |   |   | (17 | ) |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Applicable income tax expense (benefit)     |   | $      | 5,796  |   |   | $      | (2,644 | )      |   | $ | 2,080 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |

| in thousands                                                                       |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                               |   |   |   |   |   |   |
| Deferred tax assets                                                                |   |   |   |   |   |   |
|    Federal, state and foreign operating and capital loss carryforwards   |   | $      | 1,733  |   |   | $      | 11,263 |   |
|    Pension and supplemental retirement plan benefits                     |   |   | 6,788  |   |   |   | 4,502 |   |
|    Reserves, principally due to accrual for financial reporting purposes |   |   | 2,716  |   |   |   | 4,241 |   |
|    Federal, state and foreign tax credit carryforwards                   |   |   | 6,988  |   |   |   | 3,578 |   |
|   Interest rate swap                                                          |   |   | 759    |   |   |   | 1,325 |   |
| Other                                                                              |   |   | 40     |   |   |   | - |   |
|                                                                               |   |   |   |   |   |   |   |   |
| Gross deferred tax assets                                                          |   |   | 19,024 |   |   |   | 24,909 |   |
|                                                                               |   |   |   |   |   |   |   |   |
| Deferred tax liabilities                                                           |   |   |   |   |   |   |   |   |
|  Property and equipment, principally due to differences in depreciation       |   |   | (1,802 | )      |   |   | (2,221 | ) |
|                                                                               |   |   |   |   |   |   |   |   |
| Gross deferred tax liabilities                                                     |   |   | (1,802 | )      |   |   | (2,221 | ) |
|                                                                               |   |   |   |   |   |   |   |   |
|  Valuation allowance                                                          |   |   | (2,268 | )      |   |   | (4,748 | ) |
|                                                                               |   |   |   |   |   |   |   |   |
| Net deferred tax asset                                                             |   | $      | 14,954 |   |   | $      | 17,940 |   |
|                                                                               |   |   |   |   |   |   |   |   |

| 2010                   |   | $      | 616    |   |
|------------------------|--------|--------|--------|--------|
| 2011                   |   |   | 479    |   |
| 2012                   |   |   | 409    |   |
| 2013                   |   |   | 300    |   |
| 2014                   |   |   | 268    |   |
| Beyond                 |   |   | 963    |   |
| Total minimum payments |   | $      | 3,035  |   |
|                   |   |   |   |   |

| 2010                   |   | $      | 1,462  |   |
|------------------------|--------|--------|--------|--------|
| 2011                   |   |   | 1,234  |   |
| 2012                   |   |   | 535    |   |
| Total minimum payments |   | $      | 3,231  |   |
|                   |   |   |   |   |

| 2010   |   | $      | 127    |   |
|--------|--------|--------|--------|--------|
| 2011   |   |   | 117    |   |
| 2012   |   |   | 108    |   |
| 2013   |   |   | 99     |   |
| 2014   |   |   | 91     |   |
|   |   | $      | 542    |   |
|   |   |   |   |   |

| in thousands, except per share data                               |   |       |   |   |       |   |   |         |   |   |        |   |
|-------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                              |   | May 2,     |   |   | July 25,   |   |   | November 14, |   |   | February 6, |   |
| FISCAL YEAR 2009                                                  |   | 2009       |   |   | 2009       |   |   | 2009         |   |   | 2010        |   |
|                                                              |   | (12 weeks) |   |   | (12 weeks) |   |   | (16 weeks)   |   |   | (12 weeks)  |   |
| Net sales                                                         |   | $          | 93,467 |   |       | $      | 81,377 |         |   | $      | 107,286     |   |   | $ | 140,241 |   |
| Gross profit                                                      |   |       | 82,640 |   |       |   | 70,968 |         |   |   | 95,001      |   |   |   | 127,704 |   |
| Net income (loss)                                                 |   |       | 2,329  |   |       |   | (3,429 | )            |   |   | (6,802      | )      |   |   | 21,699 |   |
| Net income (loss) per share - diluted                             |   | $          | 0.34   |   |       | $      | (0.49  | )            |   | $      | (0.97       | )      |   | $ | 3.07 |   |
| Net income (loss) per share - basic                               |   | $          | 0.34   |   |       | $      | (0.49  | )            |   | $      | (0.97       | )      |   | $ | 3.10 |   |
| Weighted average number of common and equivalent shares - diluted |   |       | 6,949  |   |       |   | 7,005  |         |   |   | 7,004       |   |   |   | 7,068 |   |
| Weighted average number of common and equivalent shares - basic   |   |       | 6,949  |   |       |   | 7,005  |         |   |   | 7,004       |   |   |   | 7,008 |   |

| in thousands, except 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                                                      |   |       | 90,386  |   |       |   | 78,517 |        |   |   | 100,210     |   |   |   | 137,603 |   |
| 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 |   |       | 6,452   |   |       |   | 6,468  |        |   |   | 6,479       |   |   |   | 6,682 |   |
| Weighted average number of common and equivalent shares - basic   |   |       | 6,452   |   |       |   | 6,468  |        |   |   | 6,479       |   |   |   | 6,641 |   |

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

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

| a)   | Evaluation of Disclosure Controls and Procedures |
|----------------|--------------------------------------------------|

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

| c)   | Changes in Internal Control Over Financial Reporting |
|----------------|------------------------------------------------------|

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

| Item 10. | Directors, Executive Officers and Corporate Governance |
|----------|--------------------------------------------------------|

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

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

|                             |   |                          |    |   |                    |   |   | Number of securities            |   |   |    |
|----------------------------------|--------|-------------------------------|---------|--------|-------------------------|--------|--------|---------------------------------|--------|--------|---------|
|                             |   |                          |    |   |                    |   |   | remaining available for         |   |   |    |
|                             |   | Number of securities to be    |    |   | Weighted-average        |   |   | future issuance under equity    |   |   |    |
|                             |   | issued upon exercise of       |    |   | exercise price of       |   |   | compensation plans              |   |   |    |
|                             |   | outstanding options, warrants |    |   | outstanding options,    |   |   | (excluding securities reflected |   |   |    |
| Plan Category                    |   | and rights (a)                |    |   | warrants and rights (b) |   |   | in column (a)) (c)              |   |   |    |
| Equity compensation plans        |   |                          |    |   |                    |   |   |                            |   |   |    |
| approved by security holders (1) |   |                          | 232,546 |   |                    | $      | 13.13  |                            |   |   | 465,950 |   | (2) |   |
| Equity compensation plans not    |   |                          |    |   |                    |   |   |                            |   |   |    |   |   |   |
| approved by security holders (3) |   |                          | -       |   |                    |   | -      |                            |   |   | 80,232  |   | (4) |   |
| Total                            |   |                          | 232,546 |   |                    | $      | 13.13  |                            |   |   | 546,182 |   |   |   |
|                             |   |                          |    |   |                    |   |   |                            |   |   |    |   |   |   |

| (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 Statement Schedules |
|----------------|--------------------------------------------|

| (1.)   |   | FINANCIAL STATEMENTS |   | PAGES  |
|--------|--------|----------------------|--------|--------|
|   |   |                 |
|   |   |                 | -      |   | Report of Independent Registered Public Accounting Firm |   | 30 |
|   |   |                 | -      |   | Consolidated Balance Sheets as of February 6, 2010, and February 7, 2009 |   | 31-32 |
|   |   |                 | -      |   | Consolidated Statements of Operations for the fiscal years ended |   |   |
|   |   |                 |   |   | February 6, 2010, February 7, 2009, and February 2, 2008 |   | 33 |
|   |   |                 | -      |   | Consolidated Statements of Changes in Stockholders' Equity for the fiscal |   |   |
|   |   |                 |   |   |   | years ended February 6, 2010, February 7, 2009, and February 2, 2008 |   | 34 |
|   |   |                 | -      |   | Consolidated Statements of Cash Flows for the fiscal years ended |   |   |
|   |   |                 |   |   |   | February 6, 2010, February 7, 2009, and February 2, 2008 |   | 35-37 |
|   |   |                 | -      |   | Notes to Consolidated Financial Statements |   | 38-66 |

| (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.                         |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (4.4)    |   | Third Amendment to Form of Rights Agreement, dated March 12, 2010, by and between CPI Corp. and Computershare Trust                  |
|     |   | Company, N.A., incorporated by reference to CPI Corp.'s Form 8-K, Exhibit 10.1, filed March 18, 2010.                                |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (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)*  |   | 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.                                                         |   |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.3)*  |   | 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.                                       |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.4)*  |   | 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.                                                                                                             |   |   |   |   |   |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.5)*  |   | 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.                                                                                                                   |   |   |   |   |   |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.6)*  |   | 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.                          |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.7)*  |   | 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.                                |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.8)*  |   | CPI Corp. Key Executive Deferred Compensation Plan (As Amended and Restated June 6, 1996), incoporated by reference to               |
|     |   | CPI Corp.'s Annual Report for fiscal year 2000 on Form 10-K, Exhibit 10.36, filed May 3, 2001.                                       |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.9)*  |   | 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.                                                  |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.10)* |   | 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.                                          |
|     |   |                                                                                                                                 |   |   |   |   |   |   |
| (10.11)* |   | 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                                                                                                                   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.12)* |   | 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.                                 |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.13)* |   | 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.                                            |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.14)* |   | CPI Corp. Non-Employee Directors Restricted Stock Policy pursuant to the CPI Corp. Omnibus Incentive Plan effective as of     |
|     |   | August 14, 2008, incorporated by reference to CPI Corp.'s Annual Report for fiscal year 2008 on Form 10-K, Exhibit 10.31,     |
|     |   | filed April 23, 2009.                                                                                                         |   |   |   |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.15)* |   | CPI Corp. Non-Employee Directors Restricted Stock Policy (Restricted Stock Election), effective August 14, 2008, incorporated |
|     |   | by reference to CPI Corp.'s Annual Report for fiscal year 2008 on Form 10-K, Exhibit 10.33, filed April 23, 2009.             |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.16)* |   | Form of Option Agreement, incorporated by reference to CPI Corp.'s Form 8-K, Exhibit 10.1, filed August 21, 2008.             |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.17)* |   | 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.                                                                               |   |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.18)* |   | CPI Corp. Omnibus Incentive Plan, incorporated by reference to CPI Corp.'s Form DEF 14A, Annex A, filed June 23, 2008.        |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.19)* |   | 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                                                |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.20)* |   | 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.                                               |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.21)* |   | 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.                                         |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.22)* |   | 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.                                         |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.23)* |   | 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.                                                   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.24)  |   | 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               |
|     |   | America, Inc., (each, a "Seller") and CPI Corp., incorporated by reference to CPI Corp.'s Form 8-K, Exhibit 2.1, filed        |
|     |   | May 3, 2007.                                                                                                                  |   |   |   |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.25)  |   | 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 America, 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.                                                           |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.26)  |   | Amendment No. 2 to the Purchase and Sale Agreement dated as of June 8, 2007, by and among Portrait Corporation of America,    |
|     |   | PCA LLC, America Studios, Inc., PCA Photo Corporation of Canada, PCA National LLC, PCA Finance Corp., Inc., Photo             |
|     |   | Corporation of America, Inc., (each, a "Seller") and CPI Corp., incorporated by reference to CPI Corp.'s Form 8-K,            |
|     |   | Exhibit 2.3, filed June 24, 2007.                                                                                             |   |   |   |   |

| EXHIBIT  |   |                                                                                                                                     |   |   |   |   |   |   |
|----------|--------|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| NUMBER   |   | DESCRIPTION                                                                                                                              |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.27)  |   | 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 by reference to CPI Corp.'s Form 8-K, Exhibit 10.1, filed June 14, 2007.                                   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.28)  |   | First 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 administrative agent and              |
|     |   | arranger for the lenders, dated June 8, 2007, filed within this Form 10-K as Exhibit 10.28.                                              |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.29)  |   | 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 administrative           |
|     |   | 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.                                                                                                                 |   |   |   |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.30)  |   | 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 partites 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, incorproated by reference to       |
|     |   | CPI Corp.'s Form 8-K, Exhibit 10.47, filed April 21, 2009.                                                                               |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.31)  |   | 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 by reference to CPI Corp.'s             |
|     |   | Form 10-Q, Exhibit 10.59, filed August 30, 2007.  (Confidential treatment requested for portions of this document).            |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.32)  |   | 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 by             |
|     |   | reference to CPI Corp.'s Form 10-Q, Exhibit 10.60, filed December 20, 2007.                                                              |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.33)  |   | 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 Portait Corporation of America, Inc., effective June 8, 2007, incorporated by              |
|     |   | reference to CPI Corp.'s Form 10-Q, Exhibit 10.61, filed December 20, 2007.                                                              |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.34)  |   | License Agreement dated December 22, 2008, by and between CPI Corp., Consumer Programs Incorporated, a subsidiary of                     |
|     |   | 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.                                                                |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.35)  |   | 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.                                                                                                                       |   |   |   |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.36)* |   | Employment Agreement by and between CPI Corp. and Dale Heins, dated April 23, 2008, incorporated by reference to                         |
|     |   | CPI Corp.'s Form 8-K, Exhibit 10.62, filed April 24, 2008.                                                                               |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.37)* |   | Employment Agreement by and between CPI Corp. and Jim Mills, dated September 2, 2008, incorporated by reference to                       |
|     |   | CPI Corp.'s Form 10-Q, Exhibit 10.65, filed December 18, 2008.                                                                           |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.38)* |   | Chairman's Agreement by and between CPI Corp. and David Meyer, dated September 22, 2008, incorporated by reference to                    |
|     |   | CPI Corp.'s Form 10-Q, Exhibit 10.66, filed December 18, 2008.                                                                           |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.39)* |   | Amendment to Chairman's Agreement by and between CPI Corp. and David Meyer, dated September 25, 2009, incorporated by                    |
|     |   | reference to CPI Corp.'s Form 10-Q, Exhibit 10.58, filed December 22, 2009.  (Confidential treatment requested for portions of |
|     |   | this document.)                                                                                                                          |   |   |   |   |   |
|     |   |                                                                                                                                     |   |   |   |   |   |   |
| (10.40)* |   | Amendment to Chairman's Agreement dated September 22, 2008, and amended September 25, 2009, by and between CPI Corp.                     |
|     |   | and David Meyer, dated February 12, 2010, filed within this Form 10-K as Exhibit 10.40.                                                  |

| EXHIBIT  |   |                                                                                                                          |   |   |   |   |   |   |
|----------|--------|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| NUMBER   |   | DESCRIPTION                                                                                                                   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.41)* |   | Executive Chairman's Agreement by and between CPI Corp.and David Meyer, dated April 19, 2010, filed within this               |
|     |   | Form 10-K as Exhibit 10.41. (Confidential treatment requested for portions of this document.)                                 |
|     |   |                                                                                                                          |
| (10.42)  |   | Amendment dated as of February 22, 2010, by and between CPI Corp. and Toys "R" Us - Delaware, Inc. ("Licensor") to the        |
|     |   | Amended and Restated License Agreement made and entered into as of December 23, 2005, by and between Licensor and             |
|     |   | Kiddie Kandids, LLC.  Amended and Restated License Agreement made and entered into as of December 23, 2005, by and  |
|     |   | between Licensor and Kiddie Kandids, LLC.  These documents are filed within this Form 10-K as Exhibit 10.42.        |
|     |   | (Confidential treatment requested for portions of these documents.)                                                           |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.43)* |   | Employment Agreement by and between CPI Corp. and Keith Laakko, dated December 28, 2005, filed within this                    |
|     |   | Form 10-K as Exhibit 10.43.                                                                                                   |   |   |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.44)* |   | Confidentiality, Noncompetition and Nonsolicitation Agreement by and between CPI Corp. and Keith Laakko, dated                |
|     |   | December 28, 2005, filed within this Form 10-K as Exhibit 10.44.                                                              |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (10.45)* |   | First Amendment to Employment Agreement by and between CPI Corp. and Keith Laakko, dated December 30, 2005, filed             |
|     |   | within this Form 10-K as Exhibit 10.45.                                                                                       |
|     |   |                                                                                                                          |
| (10.46)* |   | Amended and Restated CPI Corp. Retirement Plan, effective January 1, 2010, filed within this Form 10-K as Exhibit 10.46.      |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (11.1)   |   | Computation of Income (Loss) Per Share - Diluted                                                                              |   |   |   |
|     |   |                                                                                                                          |   |   |   |   |   |   |
| (11.2)   |   | Computation of Income (Loss) 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.                  |

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 20, 2010 |
|                                           |      |   |   | (Renato Cataldo) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | David M. Meyer |   | Chairman of the Board of Directors |   | April 20, 2010 |
|                                           |      |   |   | (David M. Meyer) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | James J. Abel |   | Director |   | April 20, 2010 |
|                                           |      |   |   | (James J. Abel) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | Michael S. Koeneke |   | Director |   | April 20, 2010 |
|                                           |      |   |   | (Michael S. Koeneke) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | Michael Glazer |   | Director |   | April 20, 2010 |
|                                           |      |   |   | (Michael Glazer) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | John Turner White, IV |   | Director |   | April 20, 2010 |
|                                           |      |   |   | (John Turner White, IV) |   |   |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | Dale Heins |   | Senior Vice President, Finance, |   | April 20, 2010 |
|                                           |      |   |   | (Dale Heins) |   | Chief Financial Officer and Treasurer |   |   |
|                                           |      |   |   |   |   |   |   |   |
|                                           | /s/       |   | Rose O'Brien |   | Vice President, Corporate Controller |   | April 20, 2010 |
|                                           |      |   |   | (Rose O'Brien) |   | and Principal Accounting Officer |   |   |