UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

                                FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(D) of the
    Securities Exchange Act of 1934

    For the fiscal year ended February 2, 2002

                                  OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934 [No Fee Required]

    For the transition period from ________   to ________

                     COMMISSION FILE NUMBER 1-10204

                               CPI CORP.
     (Exact name of registrant as specified in its charter)

             DELAWARE                      43-1256674
   (State or other jurisdiction of      (I.R.S. employer
    incorporation or organization)       identification no.)

    1706 WASHINGTON AVENUE, ST. LOUIS, MISSOURI    63103-1790
     (Address of principal executive offices)      (Zip code)

(Registrant's telephone number including area code) (314) 231-1575

  Securities registered pursuant to Section 12(b) of the Act:

     COMMON STOCK $.40 PAR VALUE     NEW YORK STOCK EXCHANGE
         Title of each class          Name of each exchange
                                       on which registered

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.    YES  [X]   NO  [ ]

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.   [  ]

Aggregate market value of the registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the
New York Stock Exchange - Composite Transaction Listing on April
12, 2002 ($17.00 per share): $128,397,056.

As of April 12, 2002, 8,034,111 shares of the common stock, $0.40
par value, of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held June 6, 2002 are incorporated by reference
into Part III of this Report.






























                    (THIS PAGE LEFT INTENTIONALLY BLANK)




























                                   2


               (PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)

                            TABLE OF CONTENTS

PART I

Item 1.   Business                                           4
Item 2.   Properties                                        10
Item 3.   Legal Proceedings                                 11
Item 4.   Results of Votes of Security Holders              12

PART II

Item 5.   Market for Registrant's common stock and
           Related Stockholder Matters                      13
Item 6.   Selected Financial Data                           14
Item 7.   Management's Discussion and Analysis of
           Financial Condition and Results of Operations    17
Item 7A.  Quantitative and Qualitative Disclosures About
           Market Risk                                      26
Item 8.   Financial Statements and Supplementary Data       27
Item 9.   Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure           63

PART III

Item 10.  Directors, Executive Officers, Promoters, and
           Control Persons of the Registrant                65
Item 11.  Executive Compensation                            65
Item 12.  Security Ownership of Certain Beneficial Owners
           and Management                                   65
Item 13.  Certain Relationships and Related Transactions    65

PART IV

Item 14.  Exhibits, Financial Statement Schedules and
           Reports on Form 8-K                              66
          Signatures                                        72















                                   3



     THE STATEMENTS CONTAINED IN THIS REPORT, AND IN PARTICULAR IN
THE "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" SECTION THAT ARE NOT HISTORICAL FACTS
ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION ACT OF 1995, AND INVOLVE  RISKS AND
UNCERTAINTIES.  MANAGEMENT WISHES TO CAUTION THE READER THAT THESE
FORWARD-LOOKING STATEMENTS, SUCH AS THE COMPANY'S OUTLOOK FOR
PORTRAIT STUDIOS, FUTURE CASH REQUIREMENTS, COMPLIANCE WITH DEBT
COVENANTS, VALUATION ALLOWANCES, AND CAPITAL EXPENDITURES, ARE ONLY
PREDICTIONS OR EXPECTATIONS; ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY AS A RESULT OF RISKS FACING THE COMPANY.  SUCH RISKS
INCLUDE, BUT ARE NOT LIMITED TO:  CUSTOMER DEMAND FOR THE COMPANY'S
PRODUCTS AND SERVICES, THE OVERALL LEVEL OF ECONOMIC ACTIVITY IN
THE COMPANY'S MAJOR MARKETS, COMPETITORS' ACTIONS, MANUFACTURING
INTERRUPTIONS, DEPENDENCE ON CERTAIN SUPPLIERS, CHANGES IN THE
COMPANY'S RELATIONSHIP WITH SEARS AND THE CONDITION AND STRATEGIC
PLANNING OF SEARS, FLUCTUATIONS IN OPERATING RESULTS, THE CONDITION
OF PRINTS PLUS, INC., THE ATTRACTIONS AND RETENTION OF QUALIFIED
PERSONNEL AND OTHER RISKS AS MAY BE DESCRIBED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THIS
FORM 10-K FOR THE YEAR ENDED FEBRUARY 2, 2002.

                            PART I
ITEM I.   BUSINESS

PRODUCTS AND SERVICES

     CPI Corp. is a holding company primarily engaged, through its
subsidiaries, in the development and marketing of consumer services
and related products through a network of centrally managed, small
retail locations.  Founded in 1942, CPI Corp. became a publicly
held company in 1982 and has operations in two business segments:
Portrait Studios and Technology Development.  Unless the context
otherwise requires, references herein to "the Company" or "CPI
Corp." mean CPI Corp., its consolidated subsidiaries and their
predecessor companies.

Portrait Studios Segment
------------------------

     Within the Portrait Studio segment, the Company operates 1,031
studios as of February 2, 2002 and is the exclusive operator of all
Sears Portrait Studios in the United States, Canada and Puerto
Rico.  The Company is materially dependent upon the continued
goodwill of Sears, Roebuck and Company ("Sears") and the integrity
of the Sears name in the retail marketplace.  The Company
believes its relations with Sears are excellent and that they have
been beneficial to both companies.  (See "Dependence" later in this
section for a more detailed discussion.)

     As a leader in the professional portrait photography of
pre-school children market, the Company provides its customers with
a professional portrait studio experience and offers a variety of
products tailored to maximize customer satisfaction.  Portraits
range from wallet size to 16" by 20", with the availability of
Portrait Creations(R), greeting cards and passport photos.  The
Company also provides photo accessories, such as picture frames and
photo albums, and services that include the Portrait Preview

                              4

System and Smile Savers Plan(R).  The Smile Savers Plan(R) is a
program designed to increase repeat visits and develop long-term
customer loyalty by allowing customers to pay a one-time fee for
unlimited visits for a two-year period.

     The strategic objectives of the Portrait Studio segment are to
increase market share and profitability through the following
initiatives:
     -  create an engaging and inviting studio experience,
     -  use sophisticated, targeted marketing,
     -  build customer focus and
     -  build strategic alliances.

Technology Development Segment
------------------------------

     Over the last several years, the Company has allocated
resources to develop unique computer software platforms, such as
the Store Automation System, that improved the portrait studio
experience, streamlined workflow in the studio environment and
provided a flexible, scalable platform to develop future products.
In 2000, the Company more fully committed to this investment
in technology by forming a wholly-owned subsidiary, Centrics
Technology, Inc., committed to the full-time development of
business computer software for both the Portrait Studio segment and
other third-party business, and to treat this business as a
separate Technology Development Segment.  The Company has retained
within the Portrait Studio segment and corporate services
area the information technology services needed to support existing
field systems, develop applications for corporate use, administer
and support technical systems, desktop services and data center
operations, and provide data, voice and data security architecture
for the Company's overall information technology systems.

     Although there were some third-party computer software sales
in fiscal years 1998 and 1999, prior to fiscal year 2000, the
majority of software products developed by the Technology
Development segment were for the Portrait Studio segment.  However,
in January 2001, the Company announced the formation of
searsphotos.com, a new Sears-licensed business offering on-line
photofinishing and archiving for customers of Sears and Sears
Portrait Studios.  The new imaging service allows customers to
preserve, share and use portrait images in conjunction with
their personally created images and other memorabilia, creating
digital archives through a Sears sponsored internet-based system
maintained and marketed by the Company.  Actual photofinishing
processes are outsourced to a third party vendor.  (See
"Dependence" later in this section for a more detailed discussion
on the Sears license.)

     Consequently, within the Technology Development segment, the
Company markets an internet-based, mail-order photofinishing
business under the name searsphotos.com and offers software
programs primarily for retail service industry use, software
consulting and custom software development under the name Centrics
Technology,
Inc.

     The Technology Development group's strategic objectives are to
support the marketing of searsphotos.com, support and develop
software for Portrait Studios and develop commercial software for
other retail enterprises.
                              5

Supplier Relationships
----------------------

       In the Portrait Studio operations, the Company purchases
photographic paper, film and chemistry, from three major
manufacturers.  In the Technology Development segment, the Company
has an agreement for standard film developing and pricing as well
as other digital services with one vendor.  The Company purchases
other equipment and materials for all its operations from a
number of suppliers and is not dependent upon any other supplier
for any specific kind of equipment.

     The Company has had no difficulty in the past obtaining
sufficient materials to conduct its businesses and believes its
relationships with suppliers are good.

Intellectual Property
---------------------

     The Company owns numerous registered service marks and
trademarks, including Portrait Creations(R) and Smile Savers
Plan(R), which have been registered with the United States Patent
and Trademark Office. The Company's rights to these trademarks in
conjunction with Sears Portrait Studio will continue as long as the
Company complies with the usage, renewal filing and other legal
requirements relating to the renewal of trademarks.

Seasonality
-----------

     In the professional portrait photography business, sales are
seasonal, with the largest volume occurring in the twelve-week
fourth quarter, which includes the Thanksgiving and Christmas
seasons.  The Christmas season accounts for a high percentage of
Sears Portrait Studio sales and earnings, and the fourth fiscal
quarter (mid November through early February) typically produces a
large percentage of annual sales and earnings.

Dependence
----------

     The Company has enjoyed a strong relationship with Sears for
over 40 years, as evidenced by having been awarded the prestigious
"Partners in Progress" award several times since the inception
of the award. In 1998, Sears also honored the Company with the
"Chairman's Award" in recognition of significant product
innovations.  In 1996, the Company was the sole recipient of the
newly created Sears "Golden Opportunities" award for the most
responsive handling of customer complaints of all its licensees.

     As a Sears licensee, the Company enjoys the benefits of using
the Sears name, access to prime retail locations, Sears' daily
cashiering and bookkeeping system, store security services and
customers' ability to use their Sears credit cards to purchase
products or services, for which Sears bears all credit and
authorization risk.

     As of February 2, 2002, the Company operated 855 full-line
Sears Portrait Studios in the United States and, except in
connection with store closings, has never had Sears terminate the
operation of any portrait studio under any license agreement.

     On November 10, 1999, Sears extended the Company's license
agreements to act as the exclusive portrait photography licensee
for Sears stores in the United States and Puerto Rico through
December 31, 2008.  These agreements provide for the Company to pay
Sears a license fee of 15% of total annual net

                              6

sales for studios located in Sears stores and prohibit the Company
from offering or selling professional portrait photography studio
services in the United States, Puerto Rico or Canada in locations
other than Sears retail locations, or within twenty miles of a
Sears retail location.  Net sales are defined as gross sales less
customer returns, allowances and sales taxes.  The Company provides
all studio furniture, equipment, fixtures, leasehold improvements
and advertising. The Company is responsible for hiring, training
and compensating Company employees and must indemnify Sears against
claims arising from the operation of the Sears Portrait Studios
business.

     As of February 2, 2002, the Company also operated 53
freestanding studios in the United States that operate under the
Sears name in retail malls that are without a Sears store.  In
addition to mall rent, the Company pays Sears a
license fee of 7.5% of total annual net sales per studio in these
locations.  The Company provides all studio furniture, equipment,
fixtures, leasehold improvements and advertising.  The Company is
also responsible for hiring, training and compensating Company
employees.  These studios benefit from inclusion in advertising
that promotes Sears department store studios in the market.  The
license agreement with Sears for these remote studios was
amended on November 10, 1999, extending the term to December 31,
2008.

     As of February 2, 2002, all 120 Canadian studios operate under
a license agreement with Sears Canada, Inc., a subsidiary of Sears.
The agreement, originally negotiated in 1977, renews
automatically on a year-to-year basis but is terminable by either
party on 60 days' notice.  The license fee is 15% of total annual
net sales.  Pursuant to the license agreement, the Company
provides all studio furniture, equipment, fixtures, leasehold
improvements, and advertising and is responsible for hiring,
training and compensating Company employees.

     The Company further expanded its relationship with Sears and
the Sears Portrait Studio business through a Development and
License Agreement, dated January 31, 2001 and expiring
December 31, 2008, which deals with the development and operation
of an Internet-based business related to photofinishing, archiving
and related services, now known as searsphotos.com.

Competitive Conditions
----------------------

     The Company Portrait Studio segment operates within the
professional portrait photography industry, primarily specializing
in preschool children's portraits. In this business, the Company
competes with a number of companies that operate fixed-location,
traveling and freestanding photography studios.  Independent
professional photographers also compete with the Company in
various locations. The Company believes that its portrait
photography products and services are competitive in terms of
price, quality and convenience of purchase with similar products of
its competitors.

     The Technology Development segment operates within the
photofinishing and custom computer software fields - both highly
fragmented and specialized fields.  In the photofinishing field,
the Company believes its products and services are competitive in
terms of price, quality and convenience with similar products of
its competitors.  Since few companies have specialized in
delivering store information systems to United States based
retailers as the Technology Development segment has, the Company
has no basis for analyzing competitive conditions as applicable to
its custom computer software business.



                              7



Environmental
-------------

     The Company's operations are subject to normal environmental
protection regulations.  Compliance with federal, state and local
provisions which have been enacted or adopted regulating
the discharge of materials into the environment or otherwise
relating to the protection of the environment, is not expected to
have a material effect upon the capital expenditures, earnings or
competitive position of the Company.  At present, the Company has
not been identified as a potentially responsible party under the
Comprehensive Environmental Responses, Compensation and Liability
Act and has not established any reserves or liabilities relating to
environmental matters.

Employees
---------

     At February 2, 2002, the Company had approximately 7,200
employees, of which approximately 4,400 were part-time or temporary
employees.  The Company's employees are not members of any union,
and the Company has experienced no work stoppages.  The Company
believes that its relations with its employees are good.

Other Businesses
----------------

WALL DECOR

     In July 2001, the Company announced it had sold its
discontinued Wall Decor segment, a business formally operated by
the Company under the name Prints Plus that offered value-priced
prints, posters, frames and framing services to consumers.  The
following summarizes the Company's operations in the Wall Decor
segment.

     May 1993-     purchased 102 Prints Plus store locations from
                   Melville Corporation for $14.7 million

     April 2000-   announced sale of segment by summer of 2000,
                   classification of segment as a discontinued
                   operation, and recognition of $6.4 million
                   after taxes in anticipated losses and related
                   expenses in fiscal year 1999 in connection
                   with the sale

     August 2000-  announced negotiations to sell Wall Decor
                   business had terminated and other buyers
                   were being pursued

     April 2001-   announced signed agreement with TRU Retail,
                   Inc. to buy the Wall Decor segment and
                   recognition of a further $4.1 million after
                   tax loss for the discontinued operations in
                   fiscal year 2000

     July 2001-    announced providing TRU Retail Inc. with a
                   $6.4 revolving line of credit

     July 2001-    announced sale of Wall Decor segment to TRU
                   Retail, Inc. for $16.0 million, which included
                   receipt of $11.0 million in Preferred Security
                   of TRU Retail Inc., $4.0 million in cash,
                   other consideration netting to $1.0 million
                   and the assumption of certain liabilities

     January 2002- TRU Retail, Inc. merged into Prints Plus, Inc.

                              8

PHOTOFINISHING

     In addition, in 1982, the Company started a photofinishing
business and continued operations until October 1996.  The
following is a listing of the Company's disposition of its
photofinishing business:

     June 1996-    Sold 50 one-hour photofinishing stores to Wolf
                   Camera, Inc.

     October 1996- Established a joint venture with Eastman Kodak
                   Company by selling 51% interest in existing
                   photofinishing operations.

     October 1997- Sold remaining 49% interest to Eastman Kodak
                   Company.


                    -----------------------------


     Further financial information on continuing and discontinued
operations of the Company is in Part II, Item 7. "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS", and Part II, Item 8. "FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA".










                              9


ITEM 2.   PROPERTIES

     The following table sets forth certain information concerning
the Company's principal facilities:

PRINCIPAL FACILITIES - CPI CORP.

                      APPROXIMATE
                        AREA IN           PRIMARY      OWNERSHIP
 LOCATION             SQUARE FEET          USES        OR LEASE
-------------------   -----------  ------------------  ---------
St. Louis, Missouri      270,000   Administration and  Owned (5)
                                    Photoprocessing
St. Louis, Missouri      155,000   Parking Lots        Owned (6)
St. Louis, Missouri       57,574   Warehousing         Leased(1)
St. Louis, Missouri       20,150   Warehousing         Leased(2)
Brampton, Ontario         40,000   Administration,     Owned (7)
                                    Warehousing and
                                    Photoprocessing
Las Vegas, Nevada         21,922   Photoprocessing     Leased(3)
Thomaston, Connecticut    25,000   Administration and  Owned (8)
                                    Photoprocessing
St. Louis, Missouri       14,000   Administration      Leased(4)

(1) Lease term expires on June 30, 2002.  Segment use: corporate
    and Portrait Studio
(2) Lease term expires on June 13, 2002.  Segment use: corporate
(3) Lease term expires on May 31, 2002.   Segment use: Portrait
     Studio
(4) Lease term expires on February 29, 2004.  Segment use:
     Technology Development
(5) Segment use: corporate, Portrait Studio
(6) Segment use: corporate
(7) Segment use: Portrait Studio
(8) Segment use: Portrait Studio

     As of February 2, 2002, the Company operated 855 portrait
studios in Sears stores in the United States pursuant to the
license agreements with Sears, 120 studios in Canada under a
separate license agreement with Sears Canada, Inc. and 56 portrait
studios in shopping centers without Sears stores, which are
generally leased for at least three years with some having renewal
options.  See Part I, Item 1. "BUSINESS, Dependence" for more
information on the Sears license agreements.

     The Company believes that the facilities used in its
operations are in satisfactory condition and adequate for its
present and anticipated future operations.

     The Company's physical properties owned or leased are all
considered commercial property.

                              10


ITEM 3.   LEGAL PROCEEDINGS

     There are various suits pending against the Company, none of
which are material in nature.  It is the opinion of management that
the ultimate liability, if any, resulting from such suits will not
materially affect the consolidated financial position or results of
operations of the Company.












































                              11



ITEM 4.   RESULTS OF VOTES OF SECURITY HOLDERS

     No matters were submitted to stockholders for a vote during
the fourth quarter of fiscal year 2001.
















































                              12


PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
          STOCKHOLDER MATTERS

(a) PRICE RANGE OF COMMON STOCK AND DIVIDENDS
    -----------------------------------------

    Since April 17, 1989, the Company's common stock has been
    traded on the New York Stock Exchange under the symbol CPY.
    The following tables set forth the high and low sales prices
    of the common stock reported by the New York Stock Exchange
    and the dividend declared for each full quarterly period
    during the Company's last two fiscal years.

    FISCAL YEAR 2001
    (ending Feb. 2, 2002)       HIGH        LOW        DIVIDEND
    ---------------------     --------    --------     --------
    First Quarter             $  21.99    $  18.50     $  0.14
    Second Quarter               24.50       18.10        0.14
    Third Quarter                21.70       13.65        0.14
    Fourth Quarter               18.90       15.50        0.14

    FISCAL YEAR 2000
    (ending Feb. 3, 2001)
    ---------------------
    First Quarter             $  24.94    $  22.38     $  0.14
    Second Quarter               25.69       20.06        0.14
    Third Quarter                25.94       19.13        0.14
    Fourth Quarter               24.13       19.06        0.14

(b) SHAREHOLDERS OF RECORD
    ----------------------

    As of April 12, 2002, the market price of the Registrant's
    common stock was $17.00 per share with 8,034,111 shares
    outstanding and 1,818 holders of record.

(c) DIVIDENDS
    ---------

    The Company intends, from time to time, to pay cash dividends
    on its common stock, as its Board of Directors deems
    appropriate, after consideration of the Company's operating
    results, financial condition, cash requirements, general
    business conditions and such other factors as the Board
    of Directors deems relevant.




                              13


<TABLE>
ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA
FINANCIAL HIGHLIGHTS (1) (in millions of dollars)
--------------------
<CAPTION>
                                            2001     2000     1999
   1998     1997
                                            ----     ----     ----
   ----     ----
                                           <C>      <C>      <C>
   <C>      <C>
INCOME DATA
  Net sales                                $318.9   $320.4   $319.1

 $325.5   $303.7
  Income from cont. operations               16.1     26.1      6.7

   28.4     29.2
  Net interest expense (2)                    2.4      2.9      1.7

    0.9      2.0
  Other income (expense) (3) (4) (6)         (4.2)    (0.1)
(0.1)     5.3      2.2
  Gain (loss) on sale of interest
   in Photofinishing segment (5)                -        -
-        -     (4.2)
  Interest in joint venture (5)                 -        -
-        -     (3.3)
  Income taxes                                3.3      8.1      1.7

   11.5      8.6
  Net earnings from continuing operations     6.2     15.1      3.2

   21.3     13.3

For more detailed financial information and for the definition of
capitalized terms, see Part II, Item 7.  "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".
<FN>
(1) In 1999, the Company classified the Wall Decor segment as a
discontinued operation and reclassified the prior years'
consolidated financial statements to reflect this change.
(2) In 1998 and 1997, $2.8 million and $1.1 million, respectively,
amortization for interest income was recognized from the Promissory
 Note from Kodak.
(3) In 1999, 1998 and 1997, the Company recognized $3.2 million,
$5.0 million and $1.8 million, respectively, in other income from
the Noncompete Agreement.
(4) In 2001, 2000 and 1999, the Company, recognized $218,000 in
income and $145,000 and $3.5 million in expense, respectively, in
other expense for costs related to the termination of the Merger
Agreement.
(5) In October 1997, the Company recorded a $4.2 million loss
before taxes on the sale of its remaining interest in the joint
venture formed in October 1996.
(6) In 2001 and 2000, the Company recognized $4.5 million and
$175,000, respectively, in other expense related to the retirement
of various employees.
</FN>
</TABLE>
                                        14

<TABLE>
FINANCIAL HIGHLIGHTS (1) (continued)
--------------------
<CAPTION>
                                            2001     2000     1999
   1998     1997
                                            ----     ----     ----
   ----     ----
                                           <C>      <C>      <C>
   <C>      <C>
PER SHARE
  Net earnings from continuing
    operations - diluted (2)               $ 0.77   $ 1.87   $ 0.32

 $ 2.08   $ 1.12
  Net earnings from continuing
    operations - basic (2)                   0.78     1.92     0.33

   2.14     1.14
  Dividends                                  0.56     0.56     0.56

   0.56     0.56
  Avg. shares outstanding
   (millions of shares)-diluted              7.9      8.1     10.0
   10.2     11.8
  Avg. shares outstanding
   (millions of shares)-basic                7.8      7.9      9.7
    9.9     11.6

For more detailed financial information see Part II, Item 7.
"MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".

<FN>
(1) In 1999, the Company classified the Wall Decor segment as a
discontinued operation and reclassified the prior years'
consolidated financial statements to reflect this change.
(2) The Company recorded the repurchase of 1,211,124 shares of
common stock for $28.3 million in 2000, 1,166,650 shares of common
stock for $28.2 million in 1999, 252,214 shares of common stock for
$5.4 million in 1998 and 2,059,499 shares of common stock for $47.7
million in 1997.
</FN>
</TABLE>







                                        15



<TABLE>
FINANCIAL HIGHLIGHTS (1) (in millions of dollars) (continued)
--------------------
<CAPTION>
                                            2001     2000     1999
  1998     1997
                                            ----     ----     ----
  ----     ----
                                           <C>      <C>      <C>
  <C>      <C>
BALANCE SHEET
  Cash and cash equivalents (2)            $ 46.6   $ 38.8   $ 49.5

 $ 76.0   $ 15.3
  Current assets                             77.8     70.4     81.5

  113.7     94.4
  Net fixed assets                           63.7     72.6     84.9

  111.1    124.7
  Net assets of discontinued
   operation                                    -     16.0     23.2

    -        -
  Assets of business transferred
   under contractual arrangements(3)         11.6        -       -
      -        -
  Other assets (4)                           19.6     16.9      9.7

  9.9      9.7
  Total assets                              172.7    175.9    199.3

234.7    228.8
  Current liabilities                        50.3     49.6     42.1

 36.7     47.4
  Other liabilities                          14.4     14.6     16.3


   21.9     19.8
  Long-term debt, less current
    maturities                               42.6     51.1     59.6

  59.6     59.5
  Stockholders' equity                       65.4     60.6     81.3

 116.5    102.1

For more detailed financial information and for the definition of
capitalized terms, see Part II, Item 7.  "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".
<FN>
(1) In 1999, the Company classified the Wall Decor segment as a
discontinued operation and reclassified the prior years'
consolidated financial statements to reflect this change.
(2) The Promissory Note from Kodak of $43.9 million was paid
January 4, 1999, which resulted in the increased cash balance in
1998.
(3) Assets of business transferred under contractual arrangements
is the result of the sale of the discontinued Wall Decor operation.
(4) In 2000, initial funding of a supplementary retirement benefit
trust for key executives was established.
</FN>
</TABLE>
                                        16


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

     The Company's fiscal year ends the first Saturday of February.
Accordingly, fiscal years 2001, 2000 and 1999 ended February 2,
2002, February 3, 2001 and February 5, 2000, respectively, and
consisted of 52 weeks. Throughout "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION,"
reference to 2001, 2000 or 1999 will mean the fiscal year ended
February 2, 2002, February 3, 2001 and February 5, 2000,
respectively.

     The Company has operations in two business segments: Portrait
Studios and Technology Development.  The Portrait Studios segment
functions as the exclusive operator of Sears Portrait Studios with
1,031 locations in the United States, Canada and Puerto Rico.  The
Technology Development segment operates an internet-based and mail
order photofinishing business under the name searsphotos.com and
offers software programs primarily for the retail service industry
use, software consulting and custom software development under
the name Centrics Technology, Inc.

RESULTS OF OPERATION-FISCAL YEAR 2001 COMPARED TO FISCAL YEAR 2000
------------------------------------------------------------------

     The following table sets forth certain operating information
for each period and should be viewed in conjunction with the
consolidated financial statements and notes included in Item 8 of
this Form 10-K.

                                 Fiscal Year          Change
                              -----------------      Increase
                               2001       2000      (Decrease)
                              ------     ------     -----------
                          (in millions of dollars)
Net sales:
  Portrait Studios            $318.5     $319.5        (0.3)%
  Technology Development         3.0        0.9          --
  Intersegment sales            (2.6)        --          --
                              -------    -------
    Total net sales           $318.9     $320.4        (0.5)%
                              =======    =======
Operating earnings (losses):
  Portrait Studios            $ 32.0     $ 42.9       (25.3)%
  Technology Development        (1.7)      (1.1)       62.7 %
                              -------    -------
    Total operating earnings    30.3       41.8       (27.5)%
                              -------    -------
General corporate expenses      14.2       15.7        (9.5)%
                              -------    -------
Income from operations        $ 16.1     $ 26.1       (38.4)%
                              =======    =======

     Net sales for the Portrait Studios segment were relatively
unchanged in 2001 from 2000, as the 2.0% decrease in customer
traffic was offset by the 1.7% increase in average sales per
customer.  Operating earnings decreased in 2001 from 2000 primarily
due to increased labor costs, a result of increased employment
hours and pay rates, and increased packaging and shipping
costs, a result of higher shipping rates.

                              17

     Net sales for the Technology Development segment reflected an
increase in 2001, the first full year of operation as a separate
business segment, from 2000 due to intersegment sales.  However,
net sales to nonaffiliated companies decreased in 2001 from 2000
levels.  After elimination of intersegment sales, operating losses
increased in 2001 from 2000, reflecting lower revenues from
nonaffiliated companies and additional costs associated with
establishing separate administrative offices for the segment.

     General corporate expense decreased in 2001 from 2000
primarily as a result of lower administrative bonuses.

     The following table sets forth certain operating information
for each period and should be viewed in conjunction with the
consolidated financial statements and notes included in Item 8 of
this Form 10-K.
                                 Fiscal Year          Change
                              -----------------      Increase
                               2000       1999      (Decrease)
                              ------     ------     -----------
                          (in millions of dollars)
Net sales:
  Portrait Studios            $319.5     $319.1          0.1%
  Technology Development         0.9          -            -
                              -------    -------
  Total net sales             $320.4     $319.1          0.4%
                              =======    ========
Operating earnings (losses):
    Portrait Studios          $ 42.9     $ 22.9         87.1%
    Technology Development      (1.1)      (1.7)       (63.5)%
                              -------    -------
  Total operating earnings      41.8       21.2         96.9%
                              -------    -------
General corporate expenses      15.7       14.5          8.2%
                              -------    -------
Income from operations        $ 26.1     $  6.7        287.9%
                              =======    =======

     Net sales for the Portrait Studios segment were relatively
unchanged in 2000 from 1999, as the 2.2% decrease in customer
traffic was offset by the 2.3% increase in average sales per
customer.  Operating earnings for Portrait Studios increased in
2000 from 1999 due to lower employment costs, which resulted from
reduced studio labor hours offset partially by increased hourly
wage rates, and lower advertising expenditures, telephone costs and
administrative support costs in 2000 versus 1999 as a result of a
Company-wide profit improvement plan introduced late in 1999.

     Net sales for the Technology Development segment increased in
2000 from 1999 due primarily to business development fees received
in 2000 for the development of the searsphotos.com internet site.
Operating losses decreased in 2000 from 1999 reflecting the higher
revenues.

     General corporate expense increased in 2000 from 1999
primarily as a result of higher administrative bonuses.








































                              18



OTHER ITEMS EFFECTING RESULTS OF OPERATIONS
-------------------------------------------

     The following table sets forth certain operating information
for each period and should be viewed in conjunction with the
consolidated financial statements and notes included in Item 8 of
this Form 10-K.
                                         Fiscal Year
                                  ------------------------
                                   2001     2000     1999
                                  ------   ------   ------
                                  (in millions of dollars)
Interest expense:
  Debt                            $ 4.1    $ 4.6    $ 4.6
  Other                             0.1      0.1      0.2
                                  ------   ------   ------
    Total interest expense        $ 4.2    $ 4.7    $ 4.8
                                  ======   ======   ======
Interest income:
  Investments                     $ 1.2    $ 1.8    $ 3.1
  Income from Preferred
    Security(1)                     0.5        -        -
  Revolver (1)                      0.1        -        -
                                  ------   ------   ------
    Total interest income         $ 1.8    $ 1.8    $ 3.1
                                  ======   ======   ======
Other expense, net:
 Other income                     $(0.1)   $(0.2)   $(0.1)
 Joint venture income (4)             -        -     (3.3)
 ASCP expense (3)                  (0.2)     0.1      3.5
 Separation expense (2)             4.5      0.2        -
                                  ------   ------   ------
    Total other expense, net      $ 4.2    $ 0.1    $ 0.1
                                  ======   ======   ======
Net earnings(loss) from
  Discontinued operations (1)     $   -    $(4.1)   $(6.4)
                                  ======   ======   ======
Effective income tax rate          35.0%    35.0%    35.0%
                                  ======   ======   ======

(1) See Discontinued Operations discussion
(2) See Separation discussion
(3) See Terminated Merger Agreement discussion
(4) See Joint Venture discussion

    Interest expense decreased in 2001 from 2000 as a result of the
scheduled repayment of long-term debt.  Interest expense was
unchanged in 2000 from 1999.

     Interest income was relatively unchanged in 2001 from 2000 as
lower interest earned on short-term investments was offset by the
receipt of income from the Preferred Security.  Interest
income decreased in 2000 from 1999 due to lower cash and cash
equivalent balances as a result of the repurchase of Company stock.
(See Discontinued Operations discussion for further information.)

                              19

Discontinued Operations
-----------------------

     In April 2000, the Company announced it was negotiating to
sell its Wall Decor segment, a business operated by the Company
since 1993 under the name Prints Plus.  As a result of the
decision to exit this business, a loss of $6.4 million after taxes
was recorded in 1999 to recognize anticipated losses and related
expenses in connection with the sale.  The Company also classified
the Wall Decor segment as a discontinued operation and reclassified
prior years' financial statements to reflect this change.

     The Company had planned to complete this transaction in the
summer of 2000.  However, in August 2000, the Company announced
that negotiations to sell its Wall Decor business had terminated
and the Company was pursuing other buyers for this business.
Subsequently, in April 2001, the Company announced it had signed an
agreement with TRU Retail, Inc. ("TRU Retail"), a corporation
formed by top management of Prints Plus, to buy the Wall
Decor segment from the Company.

     As a result of these events, in 2000, net earnings of the
Company were adjusted to include a further $4.1 million after tax
loss for the discontinued wall decor operations.  This loss
reflected 2000 operating results of the Wall Decor operation, the
consideration to be received at the closing date of the sale, and
the anticipated fiscal year 2001 losses and related expenses in
connection with the sale.

     In July 2001, the Company announced it provided TRU Retail
with a $6.4 million revolving line of credit (the "Revolver"). The
Revolver is fully collateralized by the assets of TRU Retail,
expires on July 26, 2004, has interest charged at 1.0% over prime,
and has a commitment fee of 0.5% per annum payable on the unused
portion of the Revolver. The Revolver also requires TRU Retail to
maintain certain financial ratios and comply with certain
restrictive covenants.  The Revolver is held as a long-term asset
on the Company's balance sheet captioned "Assets of business
transferred under contractual arrangements: Loan Receivable." As of
February 2, 2002, TRU Retail had net borrowings of $1.5 million
under the Revolver and the Company had recorded  $120,000 in
interest income in 2001 in connection with the Revolver.

     The Company also announced in July 2001 that the sale of the
Wall Decor segment had been completed to TRU Retail for $16.0
million, which included the receipt of $11.0 million in a
Preferred Security of TRU Retail, approximately $4.0 million in
cash, other consideration netting to $1.0 million and the
assumption of certain liabilities including the ongoing guarantee
of certain operating real estate leases.  To effect the close, TRU
Retail drew approximately $3.6 million on the Revolver.

     Although the legal transfer of the ownership was completed in
July 2001, for accounting purposes, the Preferred Security, which
has a mandatory redemption in January 2012 and pays 9%
income annually, is classified as a long-term asset under the
caption "Assets of business transferred under contractual
arrangements: Preferred Security" on the Company's balance sheet.
In addition, although $11.0 million in a Preferred Security was
received in July 2001, in January 2002, TRU Retail completed an
optional redemption of $1.0 million of the Preferred Security,
resulting in the Company holding $10.0 million in a Preferred
Security at the end of 2001.  The Company has also recorded income
from the Preferred Security of $529,000 to reflect TRU Retail's
payment in January 2002 of interest income of $460,000 and $69,000
in accrued interest income at year-end.

                              20

     Due to the Company's continuing financial interest in TRU
Retail, the Company is required to follow a modified equity method
of accounting, which requires losses incurred by TRU Retail be
reflected in the Company's financials as a valuation allowance and
corresponding charge to income.  However, any future profitability
within the Company's fiscal year can be used to offset this
quarterly valuation allowance.  As a result, in third quarter 2001,
the Company recorded a $402,000 valuation allowance and charge to
income included in other expense to reflect losses incurred by TRU
Retail from July 22, 2001 through November 10, 2001 but
reversed this valuation in the fourth quarter as TRU Retail's
unaudited net earnings from July 22, 2001 to February 2, 2002 were
$1.9 million.

     In January 2002, TRU Retail, Inc. notified the Company that it
had been merged into Prints Plus, Inc.  In future financial
reporting of the Company, reference to "Prints Plus, Inc." will
include its predecessor legal entity, TRU Retail, Inc.

Separation
----------

     In February 2001, the Company announced it had hired J. David
Pierson as Chairman and Chief Executive Officer to replace the
retiring Alyn V. Essman.  The Company incurred $1.7 million and
$175,000 in 2001 and 2000, respectively, in Other Expenses related
to the severance pay, recognition of unamortized supplemental
employee retirement plan benefits and other costs associated with
the retirement of Mr. Essman and recruitment of Mr. Pierson.

     In addition, in December 2001, the Company announced that Russ
Isaak, President, and Pat Morris, Senior Executive Vice President
and President of the Company's Portrait Studio division, would
retire from their respective positions and resign from the
Company's Board of Directors effective the end of the fiscal year.
The Company incurred $2.8 million in 2001in Other Expenses for
severance pay, recognition of unamortized supplemental employee
retirement plan benefits and other costs related to these and other
administrative retirements as year-end.

     Throughout 2001, the Company reviewed its administrative
employee structure in an effort to more efficiently support the
operating divisions, which resulted in $1.1 million in severance
pay and recognition of unamortized supplemental employee
retirement plan benefits that were allocated to the operating
divisions or general corporate expense.

Terminated Merger Agreement
---------------------------

     On June 15, 1999, the Company announced that it entered into
a definitive merger agreement under which entities controlled by
affiliates of American Securities Capital Partners, L.P. ("ASCP")
(collectively, "ASCP Affiliates") and the Company's management were
to acquire the Company.

     Subsequently, on October 12, 1999, the Company announced that
it received a notice from ASCP Affiliates terminating the Merger
Agreement and of legal action by ASCP Affiliates seeking a
declaration that they were entitled to terminate and demanding
reimbursement from the Company for expenses incurred in connection
with the Merger Agreement, not to exceed $6.0 million.

     The Company served an answer and a counterclaim on October 18,
1999 in New York against the ASCP Affiliates and ASCP, asserting
that the ASCP Affiliates were in willful breach of their
obligations
                              21

under the Merger Agreement.  The Company's counterclaim sought
damages for the willful breach of the Merger Agreement by ASCP
Affiliates and also asserted a claim for up to $80 million,
together with attorney's fees and costs, from ASCP under
ASCP's guarantee of the performance obligations of its affiliates
under the Merger Agreement.

     On January 30, 2001, the Company announced that it had entered
into a settlement agreement resolving all claims and counterclaims
between ASCP, ASCP Affiliates and the Company arising out of the
termination of the Merger Agreement without the payment of any
compensation by any party.

     As a result of these events, from 1999 to 2001, the Company
recognized $3.4 million in other expenses for costs related to the
termination of the Merger Agreement.  These costs included
expenses the Company incurred during the merger process and legal
and other expenses incurred related to the litigation described
above.


Joint Venture
-------------

     In October 1996, the Company announced it had completed a
photofinishing joint venture with Eastman Kodak Company ("Kodak")
whereby Kodak purchased new shares of a former subsidiary,
Fox Photo, Inc. ("Fox"), constituting 51% of the outstanding common
stock of Fox for a cash purchase price of $56.1 million.  In
October 1997, the Company further announced the termination
of the photofinishing joint venture.  Pursuant to the termination,
Kodak purchased the remaining 49% of Fox that it did not already
own for a purchase price of $53.9 million that consisted of $10.0
million in cash in consideration of the Company's agreement not to
compete with Fox for two years (the "Noncompete Agreement") and
$43.9 million in the form of a note (the "Promissory Note")
that matured and was paid on January 4, 1999. The Noncompete
Agreement with Kodak resulted in recording $3.2 million in 1999 as
a component of other income.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
----------------------------------------------------

Operating Activities
--------------------

     Net cash generated by operating activities in 2001 of $28.8
million decreased $9.1 million from 2000 primarily due to lower
earnings.  In 2000, net cash generated by operating activities of
$37.9 million was $7.5 million more than in 1999 primarily as a
result of higher operating earnings offset slightly by decreases in
deferred revenue in 2000 from 1999, the first full year the Smile
Savers Plan(R) was in effect.

Investing Activities
--------------------

     Net cash used in investing activities in 2001 of $13.5 million
reflect a $3.7 million decrease from 2000 as higher levels of
capital expenditures were offset by lower funding requirements of
long-term investments relating to the supplementary retirement
benefits for key executives and decreases in Loan Receivable to TRU
Retail, Inc.  In 2000, net cash used in investing activities of
$17.2 million was $7.3 million less than in 1999 as a result of
lower capital expenditures being partially offset by an increase in
long-term investments caused by the initial funding of a
supplementary retirement benefit plan trust for key executives.





                              22



Financing Activities
--------------------

      Under various authorizations from the Company's Board of
Directors to acquire shares of its outstanding common stock through
purchases at management's discretion from time to time at
acceptable market prices, during 2000 and 1999, the Company
purchased 1,210,605 and 1,166,650 shares of stock for $28.3 million
and $28.2 million, respectively, at an average stock price of
$23.34 and $24.21, respectively.  As of November 2000, essentially
all shares of common stock authorized for repurchase were acquired.

Acquired shares are held as treasury stock and will be available
for general corporate purposes.  The weighted-average shares
outstanding have been adjusted to reflect the changes in shares
outstanding resulting from the repurchase of the Company's common
stock.

     As a result, net cash used in financing activities in 2001 of
$7.3 million reflected a $23.9 million decrease from 2000 as the
initial repayment of long-term debt obligations was offset by the
decrease in purchase treasury stock.  In 2000, net cash used in
financing activities was relatively unchanged from 1999.

Cash Flows
----------

     Cash flows from operations and cash and cash equivalents on
hand represent the Company's expected source of funds in fiscal
year 2002 for planned capital expenditures of $18.2 million,
scheduled principle payments on long-term debt of $8.6 million,
normal business operations and dividends to shareholders.  With the
exception of letters of credit used to support the Company's
self-insurance program and operating leases, the Company does not
use off-balance sheet arrangements to finance business activities.

Financial Condition
-------------------

     Assets of the Company decreased 1.8% in 2001 from 2000 as
increases in cash and cash equivalents and tax-related assets were
more than offset by an ordinary-course decrease in net property and
equipment and a decrease in assets held in connection with the
discontinued and subsequently sold Wall Decor segment.  Liabilities
of the Company decreased 7.0% primarily as a result of the
repayment of long-term debt and stockholders' equity increased 8.0%
due mainly to 2001 net earnings being only partially offset by
the payment of dividends to stockholders.

Risk and Critical Accounting Policies
-------------------------------------

     The Company maintains a revolving credit agreement and has a
senior debt agreement that require it to maintain certain financial
ratios and comply with certain restrictive covenants.  The most
restrictive of the covenants, which are substantially similar under
both arrangements, requires the Company to maintain designated
minimum levels of earnings before interest, taxes, depreciation and
amortization (EBITDA), as defined in the agreements, as well as
impose certain restrictions on incurring additional debt.  As of
February 2, 2002, the Company was in compliance with all debt
covenants as amended and, although dependent on attaining certain
levels of operating performance and profitability in the future,
anticipates complying with these covenants in the next year.  (See
footnote 4, "CREDIT AGREEMENTS AND OUTSTANDING DEBT" in the "NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS" in Item 8 of this 10-K
for additional information.)

                              23

      As previously discussed in the "Discontinued Operations"
section of "OTHER ITEMS EFFECTING RESULTS OF OPERATION," although
the legal transfer of the ownership of the Wall Decor segment was
completed in July 2001 to TRU Retail, for accounting purposes, the
$10.0 million Preferred Security and $1.5 million Revolver on the
Company's balance sheet at year-end are classified as a long-term
assets and represent areas of potential credit risk for the
Company.  At February 2, 2002, the Company had no valuation
allowances on its balance sheet in connection with the TRU Retail
Preferred Security or Revolver as, in the opinion of management,
TRU Retail is meeting the performance standards established under
the covenants of the Preferred Security and Revolver agreements.
However, there can be no assurance that in the future, such
valuation allowances will not be established.

     Further, if TRU Retail defaults on certain operating real
estate leases, the Company has guaranteed current monthly lease
payments over the remaining life of the leases.  As of February 2,
2002, the maximum future obligation to the Company would be $21.1
million before any negotiation with landlords on subleasing.  As
these leases mature or expire, the credit risk to the Company will
decrease.  Based on scheduled lease payments, the maximum future
obligations will decrease annually by approximately $5.4 million to
$4.8 million during the next three years.  To recognize the risk
associated with these leases and based on the Company's past
experience with renegotiating lease obligations, a $1.0 million
reserve was established. At February 2, 2002, the Company had made
no further allowances for defaults under Wall Decor operating
leases as, in the opinion of management, TRU Retail is meeting the
performance standards established under the operating leases.
However, there can be no assurance that in the future, additional
reserves will not be established.

     Accounting policies are applied in financial reports subject
to multiple sources of authoritative guidance.  Certain of the
policies established by accounting standards setters and regulators
are currently under reexamination.  Although no specific
conclusions have been reached by these standard setters,
the Company does not anticipate any changes in its application of
accounting policies.  See Part 8., Financial Statements and
Supplementary Data, Notes to Consolidated Financial Statements,
footnote 1, Summary of Accounting Policies, Business of the Company
and Principles of Consolidation, which discloses accounting
policies that are followed by the Company.

Impact of Recently Issued Accounting Standards Not Yet Adopted
--------------------------------------------------------------

     Under SFAS No. 141, "Business Combinations," all business
combinations initiated after June 30, 2001 are to be accounted
for using the purchase method of accounting. Adoption of SFAS
No. 141 will not impact the consolidated financial statements of
the Company.

     Under SFAS No. 142, "Goodwill and Other Intangible Assets,"
goodwill is no longer subject to amortization over its useful life;
rather, it is subject to at least annual assessments of impairment.
Also, under SFAS No. 142,  an intangible asset can be sold,
transferred, licensed, rented or exchanged.  Such intangibles will
be amortized over their useful lives.  Certain intangibles that
have indefinite useful lives will not be amortized. SFAS No. 142
will be implemented by the Company on February 3, 2002.  The
Company is currently in process of assessing the future impact of
adoption of SFAS No. 142, but does not anticipate a material impact
to the consolidated financial statements of the Company.

                              24

     Under SFAS No. 143, "Accounting for Asset Retirement
Obligations," the fair value of a liability for an asset retirement
obligation is required to be recognized in the period in which it
is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset.  SFAS No. 143 will be
implemented by the Company on February 3, 2002. Adoption of SFAS
No. 143 will not have a material impact on the consolidated
financial statements of the Company.

     Under, SFAS No. 144, "Accounting for the Impairment of
Disposal of Long-Lived Assets," financial accounting and reporting
for the impairment of long-lived assets and for long-lived assets
to be disposed of is addressed and supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of."  SFAS No. 144 establishes
a single accounting model for long-lived assets to be disposed of
by sale and resolves implementation issue related to SFAS No. 121.
SFAS No. 144 will be implemented by the Company on February 3,
2002.  Adoption of SFAS No. 144 will not have a material impact on
the consolidated financial statements of the Company.





SUBSEQUENT EVENT
----------------

     On April 4, 2002, the Company announced effective April 8,
2002, Gary W. Douglass would be Executive Vice President, Finance
and Chief Financial Officer, replacing Barry Arthur, who will
continue to serve as Executive Vice President, Administrative.











































                              25




ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK

     Market risks relating to the Company's operations result
primarily from changes in interest rates and changes in foreign
exchange rates.  The Company's debt obligations have primarily
fixed interest rates; therefore, the Company's exposure to changes
in interest rates is minimal.  The Company's exposure to changes in
foreign exchange rates relative to the Canadian operations is
minimal, as these operations constitute only 7.4% of the Company's
total assets and 7.1% of the Company's total sales.







































                              26




ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a) INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    ----------------------------------------------------




                                                          PAGE
                                                          ----

- Independent Auditors' Report                              29
- Consolidated Balance Sheets as of February 2, 2002
   and February 3, 2001                                  30-31
- Consolidated Statements of Operations for the fiscal
   years ended February 2, 2002, February 3, 2001 and
   February 5, 2000                                      32-33
- Consolidated Statements of Changes in Stockholders'
   Equity for the fiscal years ended February 2, 2002
   and February 3, 2001                                  34-35
- Consolidated Statements of Cash Flows for the fiscal
   years ended February 2, 2002, February 3, 2001 and
   February 5, 2000                                      36-37
- Notes to Consolidated Financial Statements                38
- Consolidated Financial Statements Schedule II -
   Valuation, Qualifying Accounts and Reserves              73

     The Company's fiscal year ends the first Saturday of February.
Accordingly, fiscal years 2001, 2000 and 1999 ended February 2,
2002, February 3, 2001 and February 5, 2000, respectively, and
consisted of 52 weeks.  Throughout the "FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA" section, reference to 2001, 2000 or 1999 will
mean the fiscal year ended February 2, 2002, February 3, 2001 and
February 5, 2000, respectively.














                              27
























                (THIS PAGE LEFT INTENTIONALLY BLANK)
































                              28



INDEPENDENT AUDITORS' REPORT
----------------------------

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS CPI CORP.:

We have audited the consolidated financial statements of CPI Corp.
and subsidiaries as listed in the accompanying index.  In
connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule
as listed in the accompanying index.  These consolidated financial
statements and financial statement schedule are the responsibility
of the Company's management.  Our responsibility is to express
an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those
standards required that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of CPI Corp. and subsidiaries as of February 2, 2002 and
February 3, 2001, and the results of their operations and their
cash flows for each of the fiscal years in the three-year period
ended February 2, 2002, in conformity with accounting principles
generally accepted in the United States of America.  Also in our
opinion, the related financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the information
set forth therein.


KPMG LLP

/s/  KPMG LLP
-------------------
St. Louis, Missouri
April 4, 2002, except for paragraph 3 of Note 4, which is as of
April 12, 2002



                              29




CONSOLIDATED BALANCE SHEETS - ASSETS
------------------------------------
(in thousands of dollars except share and per share amounts)

                                      February 2,  February 3,
                                         2002         2001
                                     ____________  __________
Current assets:
  Cash and cash equivalents            $  46,555   $  38,820
  Receivables, less allowance of
    $429 and $241, respectively            8,417       9,306
  Inventories                              9,510      10,997
  Prepaid expenses and other
    current assets                         4,178       6,013
  Deferred tax assets                          -       5,266
  Refundable income taxes                  9,123           -
                                       ---------   ---------
      Total current assets                77,783      70,402
                                       ---------   ---------
Net property and equipment                63,708      72,603
Net assets of discontinued operations          -      16,011
Assets of business transferred under
  contractual arrangements:
    Preferred Security                    10,069           -
    Loan receivable                        1,518           -
Other assets, net of amortization of
    $1,359 and $1,321, respectively       19,645      16,896
                                       ---------   ---------
      Total assets                     $ 172,723   $ 175,912
                                       =========   =========

See accompanying notes to consolidated financial statements.



















                              30



CONSOLIDATED BALANCE SHEETS-LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------
(in thousands of dollars except share and per share amounts)

                                         February 2,  February 3,
                                             2002         2001
                                         -----------  -----------
Current liabilities:
  Current maturities of long-term debt     $   8,580   $   8,580
  Accounts payable                             9,741       9,388
  Accrued employment costs                    13,538      11,159
  Accrued deferred revenue                     9,529      10,192
  Sales taxes payable                          2,816       2,799
  Accrued advertising expense                  1,384       1,328
  Accrued expenses and other liabilities       4,134       5,049
  Income taxes                                     -       1,067
  Deferred income taxes                          573           -
                                         ------------ -----------
      Total current liabilities               50,295      49,562
                                         ------------ -----------
Long-term debt                                42,639      51,142
Other liabilities                             10,686      11,670
Long-term deferred revenue                     3,677       2,966
Stockholders' equity:
  Preferred Stock, no par value,
   1,000,000 shares authorized, no
   shares issued and outstanding                   -           -
  Preferred Stock Series A, no par value           -           -
  Common stock, $0.40 par value,
   50,000,000 shares authorized;
   18,201,743 and 17,885,645 shares
   outstanding at Feb. 2, 2002 and
   Feb. 3, 2001, respectively                  7,281       7,154
  Additional paid-in capital                  49,845      44,363
  Retained earnings                          242,015     240,227
  Accumulated other comprehensive income      (6,039)     (3,466)
                                         ------------  ----------
                                             293,102     288,278
  Treasury stock at cost, 10,238,303 and
   10,242,035 shares at Feb. 2, 2002
   and Feb. 3, 2001, respectively           (227,642)   (227,699)
  Unamortized deferred compensation-
   restricted stock                              (34)         (7)
                                         ------------  ----------
      Total stockholders' equity              65,426      60,572
                                         ------------  ----------
      Total liabilities and stockholders'
       equity                              $ 172,723   $ 175,912
                                         ============  ==========
See accompanying notes to consolidated financial statements.

                              31



CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(in thousands of dollars except share and per share amounts)
Fifty-two weeks ended February 2, 2002, February 3, 2001 and
February 5, 2000

                                     2001       2000      1999
                                     ----       ----      ----
Net sales                          $318,884   $320,380  $319,135
Costs and expenses:
 Cost of sales (exclusive of
  depreciation expense shown below)  41,679     39,118    41,604
Selling, administrative
  and general expenses              237,339    230,755   244,069
Depreciation                         23,653     24,251    24,862
Amortization                            115        131     1,865
                                   ---------  --------- ---------
                                    302,786    294,255   312,400
                                   ---------  --------- ---------
Income from operations               16,098     26,125     6,735
Interest expense                      4,229      4,660     4,813
Interest income                       1,778      1,806     3,120
Other expense, net                    4,182         95       124


                                   ---------  --------- ---------
Earnings before income tax expense    9,465     23,176     4,918
Income tax expense                    3,313      8,112     1,721


                                   ---------  --------- ---------
Net earnings from
 continuing operations                6,152     15,064     3,197
                                   ---------  --------- ---------
Discontinued operations:
 Income from operations net of
  income tax expense of $86               -          -       160
Loss on disposal, net of
  tax benefit of $2,213 and
  $3,548, respectively                    -     (4,110)   (6,589)
                                   ---------  --------- ---------
Net loss from discontinued
  operations                              -     (4,110)   (6,429)
                                   ---------  --------- ---------

Net earnings (loss)                $  6,152   $ 10,954  $ (3,232)
                                   =========  ========= =========

See accompanying notes to consolidated financial statements.


                              32




CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
-------------------------------------
(in thousands of dollars except share and per share amounts)
Fifty-two weeks ended February 2, 2002, February 3, 2001 and
February 5, 2000

                                2001        2000        1999
                                ----        ----        ----
Net earnings from continuing
 operations-diluted         $     0.77  $      1.87  $      0.32
Net earnings (loss) from
 discontinued operations-
 diluted                             -        (0.51)       (0.64)
                            ----------- ------------ ------------
   Net earnings (loss)-
    diluted                 $     0.77  $      1.36  $     (0.32)
                            =========== ============ ============
Net earnings from
 continuing operations-
 basic                      $     0.78  $      1.92  $      0.33
Net earnings (loss) from
 discontinued operations-
  basic                              -        (0.53)       (0.66)
                            ----------- ------------ ------------
Net earnings (loss)- basic  $     0.78  $      1.39  $     (0.33)
                            =========== ============ ============
Weighted average number of
 common and common
 equivalent shares
 outstanding- diluted        7,938,915    8,074,860   10,009,518
                            =========== ============ ============
Weighted average number of
 common and common
 equivalent shares
 outstanding- basic          7,840,612    7,861,046    9,669,504
                            =========== ============ ============

See accompanying notes to consolidated financial statements.












                              33



<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
(in thousands of dollars except share and per share amounts)
Fifty-two weeks ended February 3, 2001
<CAPTION>
                                                   Accum
    Deferred
                                 Add'l             other
Treasury   comp'n
                          Common paid-in Retained  comp'h   stock
    restr'td
                          stock  capital earnings  income   at cost

  stock      Total
                          ------ ------- --------- --------
---------- -------- ----------
<S>                       <C>    <C>     <C>       <C>      <C>
    <C>      <C>
Balance at Feb.5, 2000    $7,117 $42,804 $233,739  $(2,945)
$(199,426) $   (32) $  81,257
                          ------ ------- --------- --------
---------- -------- ----------
Issuance of common stock
  (94,195 shares)            37   1,559        -        -
-         -      1,596
Comprehensive income
  Net earnings                -       -   10,954        -
-         -
  Foreign currency
      translation             -       -        -     (521)
-         -
    Comprehensive income      -       -        -        -
-         -     10,433
Dividends ($0.56 per
  common share)               -       -   (4,466)       -
-         -     (4,466)
Purchase of treasury
  stock, at cost              -       -        -        -
(28,273)        -    (28,273)
Amortization of deferred
  compensation-
  restricted stock            -       -        -        -
-        25         25
                         ------ ------- --------- --------
----------  -------- ----------
Balance at Feb. 3, 2001  $7,154 $44,363 $240,227  $(3,466)
$(227,699)  $    (7) $  60,572
                         ------ ------- --------- --------
----------  -------- ----------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>

                                        34



<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(continued)
----------------------------------------------------------
(in thousands of dollars except share and per share amounts)
Fifty-two weeks ended February 2, 2002
<CAPTION>
                                                  Accum
   Deferred
                                Add'l             other    Treasury

 comp'n
                         Common paid-in Retained  comp'h   stock
   restr'td
                         stock  capital earnings  income   at cost
  stock      Total
                         ------ ------- --------- --------
---------- -------- ----------
<S>                      <C>    <C>     <C>       <C>      <C>
   <C>      <C>
Balance at Feb. 3, 2001  $7,154 $44,363 $240,227  $(3,466)
$(227,699) $    (7) $  60,572
                         ------ ------- --------- --------
---------- -------- ----------
Issuance of common stock
  (316,098 shares)          127   5,482        -        -
-      (36)     5,573
Comprehensive income
  Net earnings                -       -    6,152        -
-        -
  Foreign currency
      translation             -       -        -     (811)
-        -
  Pension benefit costs       -       -        -   (1,762)
-        -
    Comprehensive income      -       -        -        -
-        -      3,579
Dividends ($0.56 per
  common share)               -       -   (4,364)       -
-        -     (4,364)
Issuance of treasury
  stock, at cost              -       -        -        -
57        -         57
Amortization of deferred
  compensation-
  restricted stock            -       -        -        -
-        9          9
                         ------ ------- --------- --------
---------- -------- ----------
Balance at Feb. 2, 2002  $7,281 $49,845 $242,015  $(6,039)
$(227,642) $   (34) $  65,426
                         ------ ------- --------- --------
---------- -------- ----------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
                                        35




CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands of dollars)
Fifty-two weeks ended February 2, 2002, February 3, 2001, and
February 5, 2000

RECONCILIATION OF NET EARNINGS TO CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES

                                    2001      2000      1999
                                    ----      ----      ----

Net earnings from continuing
  operations                      $ 6,152   $15,064   $ 3,197
Adjustments for items not
  requiring cash:
  Depreciation and amortization    23,768    24,382    26,727
  Deferred income taxes             5,408    (1,407)  (11,468)
  Deferred revenue                     40       956     9,212
  Amortization of noncompete
    agreement                           -         -    (3,228)
  Other                            (2,392)    1,826       725
Decrease (increase) in current
  assets:
  Receivables and inventories       2,376     1,233      (116)
  Refundable income taxes          (4,698)        -         -
  Prepaid expenses and other
    current assets                  1,738       317        36
Increase (decrease) in current
  liabilities:
  Accounts payable, accrued
    expenses and other liabilities  1,890       110       319
  Income taxes                     (5,492)   (3,835)    5,744
                                  --------  --------  --------
Cash flows from continuing
  operations                       28,790    38,646    31,148
Cash flows from discontinued
  operations                            -      (793)     (844)
                                  --------  --------  --------
Cash flows provided by operating
  activities                      $28,790   $37,853   $30,304
                                  ========  ========  ========


See accompanying notes to consolidated financial statements.




                              36



CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
-------------------------------------
(in thousands of dollars) Fifty-two weeks ended February 2, 2002,
February 3, 2001 and February 5, 2000
                                   2001       2000       1999
                                   ----       ----       ----
Cash flows provided by operating
 activities                      $ 28,790    $ 37,853   $ 30,304
                                 ---------   ---------  ---------
Cash flows used in financing
 activities:
 Repayment of long-term
  obligations                      (8,580)          -          -
 Issuance of common stock to
  employee stock plans              5,609       1,596      1,224
 Cash dividends                    (4,364)     (4,466)    (5,438)
 Issuance of treasury stock            62           -          -
 Purchase of treasury stock            (5)    (28,273)   (28,242)
                                 ---------   ---------  ---------
   Cash flows used in financing
    activities                     (7,278)    (31,143)   (32,456)
                                 ---------   ---------  ---------
Cash flows provided by (used in)
 investing activities:
 Additions to property and
  equipment                       (14,759)    (10,795)   (24,549)
 Change in assets of business
  transferred under contractual
  arrangements                      3,028           -          -
 Purchase of long-term investment
   for Rabbi Trust                 (1,776)     (6,419)         -
                                 ---------   ---------  ---------
   Cash flows used in investing
    activities                    (13,507)    (17,214)   (24,549)
                                 ---------   ---------  ---------
Effect of exchange rate changes
  on cash and cash equivalents       (270)       (222)       247
                                 ---------   ---------  ---------
Net increase (decrease) in cash
  and cash equivalents              7,735     (10,726)   (26,454)
Cash and cash equivalents at
  beginning of year                38,820      49,546     76,000
                                 ---------   ---------  ---------
Cash and cash equivalents at
  end of year                    $ 46,555    $ 38,820   $ 49,546
                                 =========   =========  =========
Supplemental cash flow
 information:
 Interest paid                   $  4,242    $  4,582   $  4,476
                                 =========   =========  =========
 Income taxes paid               $  7,350    $ 12,279   $  7,342
                                 =========   =========  =========
See accompanying notes to consolidated financial statements.
                              37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

1.   SUMMARY OF ACCOUNTING POLICIES, BUSINESS OF THE COMPANY AND
     PRINCIPLES OF CONSOLIDATION

     Description of  Business
     ------------------------

          CPI Corp. (the "Company") is a holding company engaged,
     through its majority or wholly owned subsidiaries and
     partnerships, in developing and marketing consumer services
     and related products.  The Company has operations in the
     Portrait Studios and Technology Development segments.

          The Portrait Studios segment operates professional
     portrait studios under the name Sears Portrait Studios
     throughout the United States, Canada and Puerto Rico, and is
     seasonal in nature, with the largest volume of sales and
     earnings occurring during the Thanksgiving and Christmas
     season.

          The Technology Development segment operates an
     internet-based and mail order photofinishing business under
     the name searsphoto.com and offers software programs
     primarily for the retail service industry use, software
     consulting and custom software development under the name
     Centrics Technology, Inc.

     Fiscal Year
     -----------

          The Company's fiscal year ends the first Saturday of
     February.  Accordingly, fiscal years 2001, 2000 and 1999
     ended February 2, 2002, February 3, 2001 and February 5,
     2000, respectively, and consisted of 52 weeks.

     Principles of Consolidation
     ---------------------------

          The consolidated financial statements include the
     accounts of CPI Corp. and its subsidiaries.  All
     significant intercompany balances and transactions have been
     eliminated in consolidation.

     Use of Estimates
     ----------------

          The preparation of financial statements in conformity
     with accounting principles generally accepted in the United
     States requires management to make estimates and assumptions
     that affect the amounts reported in the financial statements
     and accompanying notes.  Actual results could differ from
     those estimates.


     Reclassifications
     -----------------

          Certain prior quarters and year amounts have been
     reclassified to conform to the fiscal year-end 2001
     presentation.

                              38

     Translation of Foreign Currency
     -------------------------------

          Assets and liabilities of foreign operations are
     translated into U.S. dollars at the exchange rate in
     effect on the balance sheet date, while equity accounts are
     translated at historical rates.  Income and expense accounts
     are translated at the average rates in effect during each
     fiscal period.  The Company recognizes that its Canadian
     operating results are subject to variability arising from
     foreign exchange rate movements.  The Company does not
     believe such risk is material to the results of operations
     or the financial position of the Company and as such does
     not engage in derivative activities in order to hedge against
     foreign currency fluctuations.

     Cash and Cash Equivalents
     -------------------------

          For the purpose of reporting cash flows, cash and cash
     equivalents consist primarily of cash on hand and highly
     liquid investments with insignificant interest-rate risk and
     maturities of three months or less at date of acquisition.
     These highly liquid investments consist of master notes,
     commercial paper, bankers' acceptances, money market funds
     and auction rate securities.  Investment interest income for
     2001, 2000 and 1999 was $1.2 million, $1.8 million and
     $3.1 million, respectively.


     Inventories
     -----------

          Inventories in the Portrait Studio segment are comprised
     of raw material inventories of film, paper, chemicals and
     portraits-in-process, and are stated at the lower of cost or
     market, with cost of the majority of inventories being
     determined by the first-in, first-out (FIFO) method and the
     remainder by the last-in, first-out (LIFO) method.






     Property and Equipment
     ----------------------

          Property and equipment are recorded at cost when
     acquired.  Expenditures for improvements are capitalized,
     while normal repair and maintenance are expensed as
     incurred.  When properties are disposed of, the related cost
     and accumulated depreciation are removed from the accounts,
     and gains or losses on the dispositions are reflected in
     results of operations.

          For the Portrait Studios segment, the Company had
     adopted Accounting Standards Executive Committee Statement of
     Position (SOP) 98-1, "Accounting for the Costs of computer
     Software Developed or Obtained for Internal Use."  This SOP
     requires the capitalization of certain costs incurred
     in connection with developing or obtaining software for
     internal use.

          For the Technology segment, the Company has adopted
     Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards ("SFAS") No. 86, "Accounting
     for the Costs of Computer Software to Be Sold, Leased, or
     Otherwise Marketed."  This SFAS allows costs incurred to
     develop computer software products and significant
     enhancements to software features of existing products to be
     sold or otherwise marketed, be capitalized after
     technological feasibility is established.

                              39

          Depreciation on property and equipment is computed
     principally using the straight-line method over estimated
     service lives of the respective assets.   A summary of
     estimated useful lives is as follows:

               Building improvements    15 to 19 years
               Leasehold improvements    5 to 15 years
               Furniture and fixtures    5 to  8 years
               Machinery and equipment   3 to 10 years
               Computer software               5 years

     Intangible Assets
     -----------------

          Intangible assets acquired through acquisitions were
     accounted for by the purchase method of accounting and
     include the excess of cost over fair-value of net assets
     acquired.  This excess of cost over fair-value of net assets
     acquired is being amortized on a straight-line basis over
     periods ranging from five to thirty years.




          The Company analyzes excess of cost over fair-value of
     net assets acquired periodically to determine whether any
     impairment has occurred in the value of such assets.  Based
     upon the anticipated future income and cash flow from
     operations, in the opinion of Company management, there has
     been no impairment.

     Revenue Recognition
     -------------------

          Portrait Studio sales revenue is recognized at the time
     the customer approves photographic proofs and makes a firm
     commitment for a portrait order.  Incremental costs of
     production are accrued at the time sales revenue is
     recognized.  The Company maintains appropriate reserves for
     cancelability.  Smile Savers Plan(R) revenue is recognized
     partially at the time of the initial photographic session
     when it is received, and the remainder is recognized over
     the life of the customer's program.

          Technology Development revenue is recognized when earned
     in compliance with SOP 97-2, which provides guidance for
     recognizing revenue on software transactions.

     Stock-based Compensation Plans
     ------------------------------

          The Company records compensation expense for its
     stock-based employee compensation plans in accordance with
     the intrinsic-value method prescribed by Accounting
     Principles Board  Opinion No. 25, "Accounting for Stock
     Issued to Employees."  Intrinsic value is the amount by
     which the market price of the underlying stock exceeds the
     exercise price of the stock option or award on the
     measurement date, generally the date of grant.

     Earnings per Common Share
     -------------------------

          Basic earnings per common share are computed by dividing
     net earnings by the sum total of the weighted average number
     of shares of common stock outstanding.  Diluted earnings per
     common share are computed by dividing net earnings by the sum
     total of the weighted average number of shares of common
     stock outstanding plus contingently issuable shares under the
     employee stock plans.






                              40



2.   PROPERTY AND EQUIPMENT

         The following table reflects the components of net
     property and equipment as of fiscal year-end 2001 and 2000:

PROPERTY AND EQUIPMENT
(in thousands of dollars)

                                   Feb. 2, 2002   Feb. 3, 2001
                                   ------------   ------------
Land and land improvements         $   2,803      $   2,803
Building improvements                 26,514         26,398
Leasehold improvements                12,547         12,782
Furniture and fixtures                58,110         52,976
Machinery and equipment              126,005        122,707
Software                              23,580         19,762
                                   ------------   ------------
                                     249,559        237,428
Less accumulated depreciation        185,851        164,825
                                   ------------   ------------
Net property and equipment         $  63,708      $  72,603
                                   ============   ============

MINIMUM RENTAL PAYMENTS*
(in thousands of dollars)
Fiscal Year
2002                 $ 2,701
2003                   1,386
2004                     720
2005                     371
2006                     137
Thereafter                97
                     -------
                     $ 5,412
                     =======

* Under operating leases with initial terms in excess of one year
  at February 2, 2002.

          The Company leases various premises and equipment under
     noncancellable operating lease agreements with initial terms
     in excess of one year and expiring at various dates through
     fiscal year 2008.  The leases generally provide for the
     lessee to pay maintenance, insurance, taxes and certain other
     operating costs of the leased property.  In addition to the
     minimum rental commitments, certain of these operating leases
     provide for contingent rentals based on a percentage of
     revenues in excess of specified amounts.

          Rental expense during 2001, 2000, and 1999 on all
     operating leases was $3.9 million, $3.9 million, and $4.9
     million, respectively.
                              41


3.   DISCONTINUED OPERATIONS AND SUPPLEMENTAL CASH FLOW
     INFORMATION

          In April 2000, the Company announced it was negotiating
     to sell its Wall Decor segment, a business operated by the
     Company since 1993 under the name Prints Plus.  As a result
     of the decision to exit this business, a loss of $6.4 million
     after taxes was recorded in 1999 to recognize anticipated
     losses and related expenses in connection with the sale.  The
     Company also classified the Wall Decor segment as a
     discontinued operation and reclassified prior years'
     financial statements to reflect this change.

          The Company had planned to complete this transaction in
     the summer of 2000.  However, in August 2000, the Company
     announced that negotiations to sell its Wall Decor business
     had terminated and the Company was pursuing other buyers for
     this business.  Subsequently, in April 2001, the Company
     announced it had signed an agreement with TRU Retail, Inc.
     ("TRU Retail"), a corporation formed by top management of
     Prints Plus, to buy the Wall Decor segment from the Company.

          As a result of these events, in 2000, net earnings of
     the Company were adjusted to include a further $4.1 million
     after tax loss for the discontinued wall decor operations.
     This loss reflected 2000 operating results of the Wall Decor
     operation, the consideration to be received at the closing
     date of the sale, and the anticipated fiscal year 2001 losses
     and related expenses in connection with the sale.

          In July 2001, the Company announced it provided TRU
     Retail with a $6.4 million revolving line of credit (the
     "Revolver"). The Revolver is fully collateralized by the
     assets of TRU Retail, expires on July 26, 2004, has interest
     charged at 1.0% over prime, and has a commitment fee of 0.5%
     per annum payable on the unused portion of the Revolver. The
     Revolver also requires TRU Retail to maintain certain
     financial ratios and comply with certain restrictive
     covenants.  The Revolver is held as a long-term asset on the
     Company's balance sheet captioned "Assets of business
     transferred under contractual arrangements: Loan Receivable."
     At the end of 2001, TRU Retail had net borrowings of $1.5
     million under the Revolver and the Company had recorded
     $120,000 in interest income in 2001 in connection with the
     Revolver.

          The Company also announced in July 2001 that the sale of
     the Wall Decor segment had been completed to TRU Retail for
     $16.0 million, which included the receipt of $11.0 million in
     a Preferred Security of TRU Retail, approximately $4.0
     million in cash, other consideration netting to $1.0 million
     and the assumption of certain liabilities including the
     ongoing guarantee of certain operating real estate leases.

     To effect the close, TRU Retail drew approximately $3.6
     million on the Revolver.

          Although the legal transfer of the ownership was
     completed in July 2001, for accounting purposes, the
     Preferred Security, which has a mandatory redemption in
     January 2012 and pays 9% income annually, is classified
     as a long-term asset under the caption "Assets of business
     transferred under contractual arrangements: Preferred
     Security" on the Company's balance sheet.  In addition,
     although $11.0 million in a Preferred Security was received
     in July 2001, in January 2002, TRU Retail completed an
     optional redemption of $1.0 million of the Preferred
     Security, resulting in the Company holding $10.0 million
     in a Preferred Security at the end of 2001.  The Company
     has also recorded income from the Preferred Security of
     $529,000 to reflect TRU Retail's payment in January 2002
     of interest income of $460,000 and $69,000 in accrued
     income at year-end.

                              42

          Due to the Company's continuing financial interest in
     TRU Retail, the Company is required to follow a modified
     equity method of accounting, which requires losses incurred
     by TRU Retail be reflected in the Company's financials as a
     valuation allowance and corresponding charge to income.
     However, any future profitability within the Company's fiscal
     year can be used to offset this quarterly valuation
     allowance.  As a result, in third quarter 2001, the Company
     recorded a $402,000 valuation allowance and charge to income
     included in other expense to reflect losses incurred by TRU
     Retail from July 22, 2001 through November 10, 2001 but
     reversed this valuation in the fourth quarter as TRU Retail's
     unaudited net earnings from July 22, 2001 to February 2, 2002
     were $1.9 million.

          Further, if TRU Retail defaults on certain operating
     real estate leases, the Company has guaranteed current
     monthly lease payments over the remaining life of the leases.
     As of February 2, 2002, the maximum future obligation to the
     Company would be $21.1 million before any negotiation with
     landlords on subleasing.  As these leases mature or expire,
     the credit risk to the Company will decrease.  Based on
     scheduled lease payments, the maximum future obligations will
     decrease annually by approximately $5.4 million to $4.8
     million during the next three years.  To recognize the risk
     associated with these leases and based on the Company's past
     experience with renegotiating lease obligations, a $1.0
     million reserve was established. At February 2, 2002, the
     Company had made no further allowances for defaults under
     Wall Decor operating leases as, in the opinion of management,
     TRU Retail is meeting the performance standards established
     under the operating leases.  However, there can be no
     assurance that in the future, additional reserves won't be
     established.

          In January 2002, TRU Retail, Inc. notified the Company
     that it had been merged into Prints Plus, Inc.  In future
     financial reporting of the Company, reference to "Prints
     Plus, Inc." will include its predecessor legal entity, TRU
     Retail, Inc.  For comparative purposes, the following
     information is provided for 2000 and 1999 for the
     discontinued operations:

                                          2000       1999
                                       ---------  ---------
                                     (in thousands of dollars)

Net sales of discontinued operations   $ 64,998   $ 63,676
                                       =========  =========
Operating income (loss) from
  discontinued operations              $     (6)  $    246
Tax expense (benefit)                        (2)        86
                                       ---------  ---------
                                             (4)       160
                                       ---------  ---------
Asset writedown                          (8,718)    (7,736)
Adjustment *                              2,401     (2,401)
Tax benefit                               2,211      3,548
                                       ---------  ---------
Net earnings (loss) from
  discontinued operations              $ (4,110)  $ (6,429)
                                       =========  =========
* Anticipated losses for first half of 2000 recorded in 1999.




















                              43




SUPPLEMENTAL CASH FLOW INFORMATION FROM DISCONTINUED OPERATIONS
(in thousands of dollars)
                                          2000        1999
                                          ----        ----
Earnings (loss) from discontinued
 operations, net of income tax
 expense (benefit) of $(2,213) and
 ($3,462), respectively                 $ (4,110)    $ (6,429)
Adjustments for items not requiring
 cash:
  Depreciation and amortization            4,826        4,869
  Other                                      (88)          63
Decrease (increase) in current assets:
  Cash and cash equivalents                    -       (1,661)
  Receivables and inventories                (72)        (958)
  Prepaid expenses and other current
   assets                                    (40)        (212)

Assets in excess of consideration
   received                                8,719        7,911
Estimated net operating loss and
 reserve for costs associated with sale
 of Prints Plus                           (1,561)       2,226
Increase (decrease) in current
 liabilities:
  Accounts payable, accrued expenses
   and other liabilities                  (2,790)        (514)
  Deferred tax benefit                    (3,052)      (3,548)
  Capital expenditures                    (2,625)      (2,591)
                                        ---------    ---------
Cash flows from discontinued operations $   (793)    $   (844)
                                        =========    =========

COMPONENTS OF NET ASSETS OF DISCONTINUED OPERATIONS
(in thousands of dollars)
                              Feb. 3, 2001
                              ------------
Current assets                $   13,013
Property and equipment             6,607
Liabilities                        3,609
                              ------------
Net assets from
 discontinued operations      $   16,011
                              ============







                              44



4.   CREDIT AGREEMENTS AND OUTSTANDING DEBT

          The Company has a $60.0 million Senior Note Agreement
     (the "Note Agreement") privately placed with two major
     insurance companies.  The notes issued pursuant to the Note
     Agreement mature over a ten-year period with an average
     maturity of seven years with payments starting in 2001.
     Interest on the notes is payable semi-annually at an average
     effective fixed rate of 7.46%.  The Note Agreement requires
     the Company maintain certain financial ratios and comply with
     certain restrictive covenants.

          The Company incurred $591,000 in issuance costs
     associated with the private placement of the notes.  These
     costs are being amortized using the effective interest
     method over the ten-year life of the notes.

          In addition, the Company has a $30.0 million revolving
     credit facility (the "Revolving Facility") with two domestic
     banks entered into in June 2000.  The Revolving Facility,
     which will expire in June of 2003, has a variable interest
     rate charged at either LIBOR or prime funds, with an
     applicable margin added.  It is at the Company's discretion
     whether borrowings are under LIBOR or prime fund rate.  A
     commitment fee of 0.200% to 0.375% per annum is payable on
     the unused portion of the Revolving Facility.  The Revolving
     Facility requires the Company maintain certain financial
     ratios and comply with certain restrictive covenants.  The
     Company has amended the Revolving Facility under various
     agreements made in June 2001, November 2001, January 2002
     and April 2002.  The June 2001 amendment adjusted all
     covenants to exclude the discontinued and subsequently sold
     Wall Decor segment from the covenants.  The November 2001 and
     April 2002 amendments adjusted the minimum consolidated
     earnings before income taxes, depreciation and amortization
     covenant and the January 2002 amendment increased the
     dollar amount of letters of credit the Company is allowed to
     have under the Revolving Facility.  The Company is in
     compliance with all covenants as amended and expects to be
     in compliance with the covenants in the next year.

          The Company incurred $240,000 in issuance costs
     associated with the Revolving Facility, which is being
     amortized using the effective interest method over the
     three-year life of the Revolving Facility.

          There were no borrowings outstanding at February 2, 2002
     or February 3, 2001 under the Revolving Facility.

          As of February 2, 2002, the Company had outstanding
     letters of credit for the principal amount of $6.1 million.




DEBT OBLIGATIONS OUTSTANDING  (in thousands of dollars)
                                  Feb. 2, 2002    Feb. 3, 2001
                                  ------------    ------------
Senior notes, net of unamortized
 issuance costs                     $ 51,219        $ 59,715
Notes payable                              -               7
                                    --------        --------
                                      51,219          59,722
Less: current maturity                 8,580           8,580
                                    --------        --------
                                    $ 42,639        $ 51,142
                                    ========        ========

                              45

AGGREGATE LONG-TERM DEBT MATURITIES AS OF FEBRUARY 2, 2002
(in thousands of dollars)

Fiscal Year
-----------
2002                         $  8,580
2003                            8,580
2004                            8,580
2005                            8,580
2006                            8,580
2007                            8,520
                             ---------
                               51,420
Unamortized issuance costs       (201)
                             ---------
                             $ 51,219
                             =========

5.   ADVERTISING

          The Company expenses costs involved in advertising the
     first time the advertising takes place, except for
     direct-response advertising, which is capitalized and
     amortized over its expected period of future benefits.

          Direct-response advertising consists of direct mail
     advertisements, that include coupons for the Company's
     products, and of certain broadcast costs.  The capitalized
     costs of the advertising are amortized over the expected
     period of future benefits following the delivery of the
     direct mail in which it appears.

          Total advertising reported as a capitalized cost for
     direct-response advertising and classified with other assets
     for 2001 and 2000 was $1.3 million and $1.2 million,
     respectively.  Advertising expense for 2001, 2000 and 1999
     was $39.4 million, $39.2 million and $42.0 million,
     respectively.

6.   INCOME TAX

          A valuation allowance would be provided on deferred tax
     assets when it is more likely than not that some portion of
     the assets will not be realized.  The Company has not
     established a valuation allowance as of February 2, 2002, due
     to management's belief that all criteria for recognition have
     been met, including the existence of a history of taxes paid
     and available tax planning strategies sufficient to support
     the realization of deferred tax assets.

          United States income taxes have not been provided on
     $8.7 million of undistributed earnings of the Canadian
     subsidiary because of the Company's intention to reinvest
     these earnings.   The determination of unrecognized
     deferred U.S. tax liability for undistributed earnings of
     international subsidiaries is not practicable. However, it
     is estimated that foreign withholding taxes of $434,000 may
     be payable if such earnings were distributed.































                              46




EARNINGS (LOSS) BEFORE INCOME TAXES BY U.S. AND CANADIAN SOURCES
(in thousands of dollars)

                    2001           2000           1999
                 ---------      ---------      ---------
U.S.             $ 10,947       $ 18,070       $ (2,723)
Canada             (1,482)        (1,217)        (2,250)
                 ---------      ---------      ---------
                 $  9,465       $ 16,853       $ (4,973)
                 =========      =========      =========

COMPONENTS OF INCOME TAXES
(in thousands of dollars)

                    2001       2000       1999
                 ---------   ---------  ---------
Current:
 Federal         $ (1,428)   $  7,043   $  8,096
 State and local     (509)      1,612      1,262
 Canada              (158)        241        369
                 ---------   ---------  ---------
                   (2,095)      8,896      9,727
Deferred            5,408      (2,997)   (11,468)
                 ---------   ---------  ---------
                 $  3,313    $  5,899   $ (1,741)
                 =========   =========  =========

RECONCILIATION BETWEEN INCOME TAXES
(in thousands of dollars)
                                2001       2000       1999
                              --------   --------   ---------
Taxes at U.S. federal
  corporate statutory rate    $ 3,313    $ 5,899    $ (1,741)
State and local income
  taxes, net of federal tax
  benefit                         202        388         467
Stock options                    (294)       (49)       (217)
Other                              92       (339)       (250)
                              --------  --------   ---------
                              $ 3,313    $ 5,899    $ (1,741)
                              ========   ========   =========










                              47




SOURCES OF TAX EFFECTS
(in thousands of dollars)
                                      February 2,   February 3,
                                         2002           2001
                                      -----------   -----------
Deferred tax assets:
  Deferred compensation and other
    employee benefits                 $    983      $  1,358
  Expense accruals                       1,764         1,795
  Allowance for doubtful accounts           94            71
  Reserve for discontinued operations      468         6,259
  Net Canadian operating loss
   carryforward                          2,422         2,102
  Deferred revenue                       3,869         3,816
                                      -----------   -----------
    Total deferred tax assets            9,600        15,401
                                      -----------   -----------
Deferred tax liabilities:
  Property and equipment                (5,944)       (6,509)
  Revenue recognition                   (2,024)       (1,993)
  Employee pension plan                   (871)         (729)
  Other                                    (84)          (85)
                                      -----------   -----------
    Total deferred tax liabilities      (8,923)       (9,316)
                                      -----------   -----------
    Net deferred tax asset            $    677      $  6,085
                                      ===========   ===========
Current deferred income taxes         $   (573)     $  5,266
                                      ===========   ===========
Long-term deferred income taxes       $  1,250      $    819
                                      ===========   ===========

     The Company's net operating loss carryforward for its
Canadian operation totaled $5.4 million, of which $270,000, $2.2
million, $1.3 million and $1.6 million will expire in fiscal year
2005, 2006, 2007, and 2008, respectively.














                              48



7.   RETIREMENT PLAN

          The Company maintains a qualified, noncontributory
     pension plan that covers all full-time United States
     employees meeting certain age and service requirements.
     The plan provides pension benefits based on an employee's
     length of service and the average compensation earned from
     the later of the hire date or January 1, 1998 to the
     retirement date. The Company's funding policy is to
     contribute annually at least the minimum amount required
     by government funding standards, but not more than is tax
     deductible.  Plan assets consist primarily of marketable
     equity securities fund, guaranteed interest contracts,
     cash equivalents, immediate participation guarantee
     contracts and government bonds.

          The following provides a reconciliation of benefit
     obligations, plan assets, and funded status of the plan.
     The retirement plan utilizes a December 31 measurement
     date.

NET PERIODIC PENSION BENEFIT COSTS
(in thousands of dollars)
                                          Pension Benefits
                                     --------------------------
                                       2001     2000     1999
                                     -------- -------- --------
Service cost                         $ 1,252  $ 1,153  $ 1,207
Interest cost                          2,264    2,008    1,896
Expected return on plan assets        (2,810)  (2,697)  (2,513)
Amortization of transition obligation      3        3        3
Amortization of prior service cost       412      306      307
Amortization of net (gain) or loss         -      (91)       -
                                     -------- -------- --------
Net periodic pension expense         $ 1,121  $   682  $   900
                                     ======== ======== ========


ASSUMPTIONS ON FUNDED STATUS
                                     2001      2000      1999
                                   --------  --------  --------
Discount rate (weighted average)     7.0%      7.25%     7.5%
Expected return on plan assets       9.0%      9.0%      9.0%
Rate of compensation increase        4.0%      4.5%      4.75%







                              49

RECONCILIATION OF BENEFIT OBLIGATIONS, PLAN ASSETS, AND FUNDED
STATUS
(in thousands of dollars)
                                             2001       2000
                                           ---------  ---------
CHANGE IN BENEFIT OBLIGATION
  Beginning benefit obligation             $ 30,698   $ 26,400
                                           ---------  ---------
  Service cost                                1,252      1,153
  Interest cost                               2,264      2,008
  Actuarial (gains) or losses                 1,248      2,316
  Benefits paid                              (1,448)    (1,179)
  Plan amendments*                            1,051          -
                                           ---------  ---------
    Ending benefit obligation              $ 35,065   $ 30,698
                                           =========  =========
CHANGE IN PLAN ASSETS
  Beginning fair value of plan assets      $ 29,365   $ 30,609
                                           ---------  ---------
  Actual return on plan assets                 (707)       (65)
  Employer contributions                      1,007          -
  Benefits paid                              (1,448)    (1,179)
                                           ---------  ---------
    Ending fair value of assets            $ 28,217   $ 29,365
                                           =========  =========
  Funded status                            $ (6,848)  $ (1,333)
  Unrecognized transition obligation              -          3
  Unrecognized prior service costs            2,791      2,152
  Unrecognized net actuarial(gain) or loss    4,945        179
  Fourth quarter contribution                 3,347          -
                                           ---------  ---------
    Benefit cost recognized                $  4,235   $  1,001
                                           =========  =========
Amounts recognized in the consolidated
  balance sheets of the Company:
    Prepaid pension assets (included
     in other assets)                      $      -   $  1,001
    Accrued benefit liability (included
     in accrued expenses and other
     liabilities)                              (319)         -
    Accumulated other comprehensive income    1,762          -
    Intangible asset (included in other
     assets                                   2,792          -
                                           ---------  ---------
     Benefit cost recognized               $  4,235   $  1,001
                                           =========  =========

* Plan amendments at the start of fiscal 2001 included changing
  the limit used in average compensation earned from $50,000 from
  the later of the hire date or January 1, 1995 to $100,000 from
  the later of the hire date or January 1, 1998.

                              50


          The Company also maintains a noncontributory pension
     plan that covers all permanent Canadian employees meeting
     certain service requirements.  The plan provides pension
     benefits based on an employee's length of service and annual
     compensation earned.  The Company contributed $177,000 to
     this retirement plan in calendar 2001.  Plan assets were $1.3
     million as of December 31, 2001 and consisted of several
     Canadian equity and fixed income funds and a global equity
     fund.  No liability is reflected on the Company's financials
     as the plan is fully funded.

          For certain key executives, the Company also sponsors a
     noncontributory defined benefit plan providing supplementary
     retirement benefits. The cost of providing these benefits is
     accrued over the remaining expected service lives of the
     active plan participants.  Net supplementary retirement
     benefits costs for 2001, 2000, and 1999 were $2.0 million,
     $1.9 million and $1.0 million, respectively.  The status of
     the supplementary retirement benefit plan was:

PLAN STATUS (in thousands of dollars)
                                      February 2,  February 3,
                                         2002         2001
                                      -----------  -----------
  Present value of accumulated post-
    retirement benefit obligations    $   8,326    $    9,773
  Unrecognized transition obligation       (817)       (2,168)
                                      ----------   -----------
  Accrued post-retirement benefit
    obligation                        $   7,509    $    7,605
                                      ==========   ===========

  Discount rate used                        7.0%         7.25%
                                      ==========   ===========

          In 2000, the Company established a Rabbi Trust (the
     "Trust") with an initial cash contribution of $6.4 million
     in cash and certain company-owned life insurance policies to
     fund the supplementary retirement benefit plan for certain
     key executives.  Plan assets amounted to $14.4 million on
     February 2, 2002.  The Trust is classified as a long-term
     other asset on the Company's balance sheet.










                              51



8.   STOCK-BASED COMPENSATION PLANS

          The Company currently offers eight stock-based
     compensation plans.  Expenses recognized for 2001, 2000,
     and 1999 with respect to all eight stock-based plans were:

      Plan *                         2001     2000     1999
-------------------------------     ------   ------  -------
                                    (in thousands of dollars)

Profit Sharing                      $ 689     $ 515    $ 644
Deferred Compensation and Stock
  Appreciation Rights                 149        88       35
Restricted Stock                        9        24       26
Stock-Bonus                           (64)      180      (15)
                                    ------    ------   ------
                                    $ 783     $ 807    $ 690
                                    ======    ======   ======

* No expense was recognized for the Stock-Option, Voluntary
  Stock-Option, Key Executive Deferred Compensation or Centrics
  Stock Option plans.

          Further, except for the Restricted Stock liability,
     which is shown as a component of stockholder's equity, as
     of the fiscal year-end 2001, 2000 and 1999, the following
     liabilities were included as components of other liabilities:

                        February 2,   February 3,   February 5,
      Plan*                2002          2001          2000
----------------------- -----------   -----------   -----------
                              (in thousands of dollars)

Profit Sharing           $   702       $   594        $   703
Deferred Compensation
 and Stock Appreciation
 Rights                    1,928         2,701          2,817
Stock-Bonus                  235           418            429
                        -----------   ----------    -----------
   Total liability       $ 2,865       $ 3,713        $ 3,949
                        ===========   ==========    ===========

* No liabilities were recognized for the Stock-Option, Voluntary
  Stock-Option, Key Executive Deferred Compensation or Centrics
  Stock Option plans.

          The following descriptions reflect pertinent information
     with respect to each individual plan:

     Stock-Option Plan
     -----------------
          The Company has an amended and restated non-qualified
     stock-option plan, under which certain officers and key
     employees may receive options to acquire shares of the
     Company's common stock.  Awards of stock options and the
     terms and conditions of such awards are subject to the
     discretion of the

                              52

     Stock Option Committee created under the plan and consisting
     of members of the Compensation Committee of the Board of
     Directors, all of who are disinterested directors.  A total
     of 1,700,000 shares has been authorized for issuance under
     the plan.  Under the plan, 262,479 options granted become
     exercisable at a rate of one-fourth a year commencing one
     year after award and expiring from four to eight years after
     award.  An additional 834,641 options granted under the plan
     are cliff-vested and become exercisable from four to five
     years after award and expire six to eight years after award.
     As of February 2, 2002, there were 155,924 shares reserved
     For issuance under this plan.

TOTAL OUTSTANDING CPI CORP. STOCK OPTIONS -- YEAR-END 2001

            Number of     Per Share    Weighted     Weighted
             Shares     Option Price     Life*    Average Price
            ---------   -------------  --------   -------------
              390,162   $13.88-$20.45    3.68        $17.78
              341,958   $21.06-$27.13    3.66        $24.97
              365,000   $30.00-$35.00    1.50        $32.50
            ---------
Total       1,097,120
            =========

* Weighted average remaining contractual life in years

TOTAL EXERCISABLE CPI CORP. STOCK OPTIONS -- YEAR-END 2001

                 Number of      Per Share     Weighted
                  Shares      Option Price      Price*
                 ---------    -------------   --------
                  405,901     $13.88-$27.13   $ 21.11
                  365,000     $30.00-$35.00   $ 32.50
                 ---------
Total             770,901
                 =========

* Weighted average exercise price in dollars










OPTIONS AWARDED UNDER THE CPI CORP. STOCK OPTION PLAN - 2001

                                       Number       Weighted
                                         of         Average
                                       Shares       Price
                                     ---------      --------
Outstanding at beginning of year      956,146       $ 25.88
Granted                               243,241         19.16
Cancelled                             (63,498)        22.87
Exercised                             (38,769)        15.75
                                     ---------      --------
At end of year:
  Total outstanding                  1,097,120       $ 24.92
                                     =========      ========
  Total exercisable                    770,901       $ 26.50
                                     =========      ========

                              53

OPTIONS AWARDED UNDER THE CPI CORP. STOCK OPTION PLAN - 2000

                                      Number        Weighted
                                        of          Average
                                      Shares        Price
                                     ----------     --------
Outstanding at beginning of year     1,010,746      $ 25.25
Granted                                  3,216        24.88
Cancelled                                    -           -
Exercised                              (57,816)       14.82
                                     ----------     --------
At end of year:
  Total outstanding                    956,146      $ 25.88
                                     ==========     ========
  Total exercisable                    688,977      $ 25.98
                                     ==========     ========

OPTIONS AWARDED UNDER THE CPI CORP. STOCK OPTION PLAN - 1999

                                      Number        Weighted
                                        of          Average
                                      Shares        Price
                                     ----------     --------
Outstanding at beginning of year       973,109      $ 24.82
Granted                                 75,369        27.12
Cancelled                              ( 2,313)       25.94
Exercised                             ( 35,419)       17.39
                                     ----------     --------
At end of year:
  Total outstanding                   1,010,746      $ 25.25
                                     ==========     ========
  Total exercisable                    719,633       $ 25.13
                                     ==========     ========


          Based on the Black-Scholes option pricing model, the
     weighted-average fair value of options granted under the
     stock-option plan for 2001, 2000 and 1999 is $12.54, $15.50
     and $21.41, respectively, with the following weighted average
     assumptions used for the grants:
                            2001         2000        1999
                         ---------    ---------    ---------
Expected life in years          5            5            5
Interest rate                 6.0%         6.0%         6.0%
Volatility                   30.7%        29.5%        43.0%
Dividend yield           2.1%-3.9%    2.1%-3.3%    2.1%-3.9%

          The Company has adopted the disclosure-only provisions
     of SFAS No. 123, "Accounting for Stock-Based Compensation."
     Had compensation cost for the Company's stock option plan
     been determined based on the fair value at the grant date for
     awards in 2001, 2000 and 1999 consistent with the provisions
     of SFAS No. 123, the Company's net earnings and earnings per
     common share would have been:

                              54

EARNINGS AND EARNINGS PER SHARE
(in thousands of dollars except per share amounts)
                                        2001     2000    1999
Net earnings (loss):
  as reported                        $ 6,152   $ 10,954 $(3,232)
                                     ========  ======== ========
  pro forma                          $ 5,964   $ 10,840 $(3,380)
                                     ========  ======== ========
Diluted earnings (loss) per common
  share:
    as reported                      $  0.77   $ 1.36   $ (0.32)
                                     ========  =======  ========
    pro forma                        $  0.75   $ 1.34   $ (0.34)
                                     ========  =======  ========
Basic earnings (loss) per common
  share:
    as reported                      $  0.78   $ 1.39   $ (0.33)
                                     ========  =======  ========
    pro forma                        $  0.76   $ 1.38    $(0.35)
                                     ========  =======  ========
     Restricted Stock Plan
     ---------------------
          The Company has an amended and restated restricted stock
     plan that has 250,000 shares of CPI Corp. common stock
     reserved for issuance to key employees.  In 2001, 2,500
     restricted shares were issued and vest over a three-year
     period.  Of the grants issued, no shares were forfeited in
     2001, 2000 or 1999.  As of February 2, 2002, 52,257 shares
     are reserved for issuance under this plan.  Expenses related
     to the restricted stock plan are accrued every four weeks,
     based on the fair market value of the Company's common stock
     on the grant date.
     Profit Sharing Plan
     -------------------
          Under the Company's profit-sharing plan, as amended and
     restated, eligible employees may elect to invest from 1% to
     15% of their base compensation in a trust fund, the assets of
     which are invested in securities other than Company stock.
     The Company matches at 50% of the employee's investment
     contributions, up to a maximum of 5% of the employee's
     compensation, as long as the Company remains profitable.  The
     Company's matching contributions are made in shares of its
     common stock which vest 100% once an employee has five years
     of service with the Company.  The difference between the
     market value of forfeited shares at the dates of their
     original contribution and their market value at the dates
     used to satisfy subsequent requirements has been charged to
     expense, with a corresponding credit to additional paid-in
     capital.  Expenses related to the profit-sharing plan are
     accrued in the year to which the awards relate, based on the
     fair market value of the Company's common stock to be issued,
     determined as of the date earned.  The Company provided
     32,624, 25,753 and 27,720 shares to satisfy its obligations
     under the plan for 2001, 2000 and 1999, respectively.

     Stock-Bonus Plan
     ----------------
          Under the Company's amended and restated stock-bonus
     plan, shares of the Company's common stock are reserved for
     issuance to key salaried employees, based on attainment by
     the Company of predefined earnings levels established
     annually.  Each year, employees receive one-third of the
     shares that were awarded in each of the previous three years.
     For 2001, 2000 and 1999, 2,406, 3,159 and 2,195 shares,

                              55

     respectively, were distributed under this plan.  As of
     February 2, 2002, 85,361 shares are reserved for issuance
     under this plan.  Expenses related to the stock-bonus plan
     are accrued in the year to which the awards relate, based on
     the fair market value of the Company's common stock to be
     issued, determined as of the date earned.

     Voluntary Stock-Option Plan
     ---------------------------
          The Company has an amended and restated non-qualified
     voluntary stock-option plan, under which certain key officers
     may receive options to acquire shares of the Company's common
     stock in exchange for a voluntary reduction in base salary.
     Options were granted as participants elected, pursuant to
     their Stock Option Agreement, to reduce their compensation
     for 1994 and 1993.  A total of 1,000,000 shares has been
     authorized for issuance.  As of February 2, 2002, 122,156
     options at an exercise price of $15.50 for 1994 salary
     reduction have been awarded and remain unexercised.
     Since 1995, this plan was not offered.  Options granted are
     exercisable after three years and expire at the end of eight
     years.  In fiscal 2001, 2,400 shares at a price of $18.375
     per share were cancelled and 250,670 shares at a weighted
     average price of $17.59 were exercised under this plan.  In
     fiscal 2000, 5,500 shares at a price of $15.50 per share were
     exercised under the plan and no shares were cancelled.  No
     shares were exercised or cancelled in fiscal 1999.  All
     options granted under this plan expired February 6, 2002.

     Deferred Compensation and Stock Appreciation Rights Plan
     --------------------------------------------------------
          The Company has a deferred compensation and stock
     appreciation rights plan.  Under this plan, as amended and
     restated, within thirty days prior to the beginning of
     the fiscal year, eligible employees may irrevocably elect by
     written notice to the Company to defer the payment of a
     portion (not to exceed 50% and not less than $5,000 in the
     aggregate) of an incentive bonus.  The participant may choose
     to have payments made either in a lump sum or in a specified
     number of annual installments, not to exceed ten.  For 2001,
     2000 and 1999, certain key executives elected to participate
     in this plan.  All stock appreciation rights previously
     granted under the Plan have expired.

     Key Executive Deferred Compensation Plan
     ----------------------------------------
          The Company has a deferred compensation plan for key
     executives which allows deferral of base salary on
     substantially the same terms as bonus compensation may
     be deferred under the Deferred Compensation and Stock
     Appreciation Plan.  Under this plan, as amended and restated,
     a participant may elect by written notice to the Company to
     defer up to 50% of his base salary for the fiscal year, but
     not less than $5,000 in the aggregate.  Payment shall not
     commence earlier than six months and one day after the
     initial year of deferral.  The participant may choose to have
     payments made either in a lump sum or in a specified number
     of annual installments, not to exceed ten.  For 2000 and
     1999, certain key executives elected to participate in this
     plan.  No key executives elected to participate in this plan
     in 2001.

     Centrics Stock Option Plan
     --------------------------
          On February 4, 2001, Centrics Technology, Inc.
     authorized 150,000 shares at $5.00.  Shares granted in 2001
     were 108,000, with 12,200 exercisable at year-end.  Based on
     the Black-Scholes option pricing model, the weighted-average
     fair value of options granted under the stock-option plan for
     2001 is $2.77, with the following weighted average
     assumptions used for the grants: 5-year expected life and
     6.0% interest rate.
                              56

9.   STOCK REPURCHASE PLAN

          In April 2000 and completed by November 2000, the
     Company's Board of Directors authorized the purchase of up
     to 500,000 shares of its outstanding common stock through
     purchases at management's direction from time to time at
     acceptable market prices.  Under this authorization,
     the Company purchased 489,165 shares of stock for $11.1
     million at an average stock price of $22.63 and is holding
     these shares as treasury stock available for general
     corporate purposes.

          In addition, from 1996 to 1999, the Company's Board of
     Directors authorized the repurchase of up to 5,500,000 shares
     of its outstanding common stock through open market purchases
     and authorized repurchasing 4,249,215 of it outstanding
     common stock through two separate "Dutch Auction" tender
     offers.  As of February 2, 2002, the Company had purchased
     9,749,138 shares of stock for $216.6 million at an average
     stock price of $22.21 under these initiatives and is holding
     it as treasury stock available for general corporate
     purposes.

10.  SHAREHOLDER RIGHTS PLAN

          In 2000, the Board of Directors renewed its Shareholders
     Rights Plan ("Rights Plan") under which holders of  CPI Corp.
     common stock after March 2000 are granted a dividend
     distribution of one right ( a "Right") for each share of
     Company common stock held.  Each Right entitles stockholders
     to buy one one-hundredth of a share of Series A Participating
     Preferred Stock of the Company at an exercise price of
     $96.00.  Each preferred share fraction is designed to be
     equivalent in voting and dividend rights to one share of
     common stock.

          The Rights will be exercisable and will trade separately
     from the shares of common stock only if a person or group,
     with certain exceptions, acquires beneficial ownership of 20%
     or more of the shares of common stock or commences a tender
     or exchange offer that would result in such person or group
     beneficially owning 20% or more of the shares of common
     stock.  Prior to this time, the Rights will not trade
     separately from the common stock. The Company may redeem the
     Rights at $.001 per Right at any time prior to the occurrence
     of one of these events. All Rights expire on March 13, 2010.

          Each Right will entitle its holders to purchase, at the
     Right's then-current exercise price, common stock of CPI
     Corp, having a value of twice the Right's exercise price.
     This amounts to the right to buy common stock of the Company
     at half price. Rights owned by the party triggering the
     exercise of Rights will not be exercisable.  In addition, if,
     after any person has become a 20%-or-more stockholder, the
     Company is involved in a merger or other business combination
     transaction with another person in which its shares of common
     stock are exchanged or converted, or sells 50% or more of its
     assets or earning power to another person, each Right will
     entitle its holder to purchase, at the Right's then-current
     exercise price, shares of common stock of such other person
     having a value of twice the Right's exercise price.

                              57

11.  INDUSTRY SEGMENT INFORMATION

          The Company has operations in two business segments:
     Portrait Studios and Technology Development.  The Portrait
     Studios segment functions as the exclusive operator of Sears
     Portrait Studios and has 1,031 fixed portrait studio
     Locations in the United States, Canada and Puerto Rico.  The
     Technology Development segment markets an internet-based,
     mail-order photofinishing business under the name
     searsphotos.com, and offers software programs primarily for
     retail service industry use, software consulting and custom
     software development under the name Centrics Technology, Inc.
     (See ("ITEM 1, BUSINESS, PORTRAIT STUDIOS SEGMENT and
     TECHNOLOGY DEVELOPMENT SEGMENT" for more information.)

          Prior to the decision in 2000 to report the Technology
     Development segment separately, costs associated with this
     segment were included in the Portrait Studios segment.  Prior
     years' footnote disclosure in this report has been restated
     to reflect this change.

GEOGRAPHIC FINANCIAL INFORMATION
(in thousands of dollars)

                                     2001      2000      1999
NET SALES*:
 United States                     $296,125  $296,847  $297,206
 Canada                              22,759    23,533    21,929
                                   --------  --------  --------
                                   $318,884  $320,380  $319,135
                                   ========  ========  ========
LONG-LIVED ASSETS:
 United States                     $ 90,087  $ 83,988  $ 90,615
 Canada                               4,853     5,511     4,007
                                   --------  --------  --------
                                   $ 94,940  $ 89,499  $ 94,622
                                   ========  ========  ========


* Net sales are attributed to countries based on location.


                              58



SELECTED INDUSTRY SEGMENT INFORMATION
(in thousands of dollars)

                                  2001       2000       1999
NET SALES
 Portrait Studio              $ 318,476   $ 319,492   $ 319,065
 Technology Development           3,034         888          70
Intersegment sales               (2,626)          -           -
                              ----------  ----------  ----------
                              $ 318,884   $ 320,380   $ 319,135
                              ==========  ==========  ==========
INCOME FROM OPERATIONS
 Portrait Studio operating
  earnings                    $  32,044   $  42,897   $  22,924
 Technology Development
     Operating earnings          (1,734)     (1,066)     (1,680)
Corporate expenses              (14,212)    (15,706)    (14,509)
                              ----------  ----------  ----------
                              $  16,098   $  26,125   $   6,735
                              ==========  ==========  ==========
SEGMENT ASSETS
 Portrait Studio              $  73,114   $  82,991   $  98,188
Technology Development            1,247         348           -
 Corporate cash and cash
  equivalents                    46,555      38,820      49,546
 Corporate other                 51,807      37,742      28,352
 Net assets of discontinued
  operations*                         -      16,011      23,177
                              ----------  ----------  ----------
                              $ 172,723   $ 175,912   $ 199,263
                              ==========  ==========  ==========
DEPRECIATION AND AMORTIZATION
 Portrait Studio              $  20,542   $  21,284   $  23,885
 Technology Development             161          21           -
 Corporate                        3,065       3,077       2,842
                              ----------  ----------  ----------
                              $  23,768   $  24,382   $  26,727
                              ==========  ==========  ==========
CAPITAL EXPENDITURES
 Portrait Studio              $  13,037   $   7,707   $  23,130
 Technology Development             990         330           -
 Corporate                          937       3,716       2,314
 Disposals                         (205)       (958)       (895)
                              ----------  ----------  ----------
                              $  14,759   $  10,795   $  24,549
                              ==========  ==========  ==========

* See "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, 2.
  DISCONTINUED OPERATIONS AND SUPPLEMENTAL CASH FLOW
  INFORMATION" for more information.

                              59



12.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

                                     QUARTER ENDED:
                         (in thousands of dollars except share
                               and per share amounts)
                         April 28,  July 21,   Nov. 10,   Feb. 2,

             2001       2001       2001       2002

(12 wks)   (12 wks)   (16 wks)  (12 wks)
                        -----------------------------------------
FISCAL YEAR 2001
Net sales                $ 65,026  $ 59,071  $ 96,872  $ 97,915
Gross margin               56,836    50,624    84,098    85,647
Net earnings (loss) from
 continuing operations         41    (1,120)      153     7,078
Net earnings (loss)            41    (1,120)      153     7,078
-----------------------------------------------------------------
Net earnings (loss) per
 share from continuing
 operations-diluted      $   0.01  $  (0.14) $   0.02  $   0.88
Net earnings (loss) per
 share - diluted             0.01     (0.14)     0.02      0.88
-----------------------------------------------------------------
Net earnings
(loss) per
 share continuing
 operations - basic      $   0.01  $  (0.14) $   0.02  $   0.89
Net earnings (loss) per
 share - basic               0.01     (0.14)     0.02      0.89
-----------------------------------------------------------------
Weighted average number
 of common and common
 equivalent shares-
 diluted (in thousands)     7,829     7,791     7,983     8,020
Weighted average number
 of common and common
 equivalent shares-
 basic (in thousands)       7,690     7,791     7,913     7,945
-----------------------------------------------------------------











                              60




                                    QUARTER ENDED:
                        (in thousands of dollars except share
                              and per share amounts)
                        April 29,  July 22,   Nov. 11,   Feb. 3,
                          2000       2000       2000       2001
                        (12 wks)   (12 wks)   (16 wks)  (12 wks)
                        ----------------------------------------
FISCAL YEAR 2000
Net sales                $ 66,901  $ 60,845  $ 96,453  $ 96,182
Gross margin               58,621    53,003    85,033    84,605
Net earnings (loss) from
 continuing operations      2,180     2,011     2,955     7,918
Net earnings (loss) from
 discontinued operations        -      (583)   (3,297)     (230)
Net earnings (loss)         2,180     1,428      (342)    7,688
----------------------------------------------------------------
Net earnings (loss) per
 share from continuing
 operations - diluted    $   0.26  $   0.25  $   0.37  $   1.02
Net earnings (loss) per
 share from discontinued
 operations - diluted           -     (0.07)    (0.41)    (0.03)
Net earnings (loss) per
 share - diluted             0.26      0.18     (0.04)     0.99
----------------------------------------------------------------
Net earnings (loss) per
 share from continuing
 operations - basic      $   0.26  $   0.25  $   0.38  $   1.04
Net earnings (loss) per
 share from discontinued
 operations - basic             -     (0.07)    (0.42)    (0.03)
Net earnings (loss) per
 share - basic               0.26      0.18     (0.04)     1.01
----------------------------------------------------------------
Weighted average number
 of common and common
 equivalent shares-
 diluted (in thousands)     8,470     8,176     7,923     7,781
Weighted average number
 of common and common
 equivalent shares-
 basic (in thousands)       8,233     7,961     7,702     7,601
----------------------------------------------------------------








                              61


13.  FAIR VALUE OF FINANCIAL INSTRUMENTS

          Fair value estimates are made at a specific point in
     time, based on relevant market information and information
     about the financial instrument. These estimates are
     subjective in nature and involve uncertainties and matters of
     significant judgement and, therefore, cannot be determined
     with precision. Changes in assumptions could significantly
     affect the estimates.

     Cash and Cash Equivalents, Receivables, Accounts Payable and
     ------------------------------------------------------------
      Accrued Expenses
      ----------------
          The carrying amounts approximate fair value at February
     2, 2002 and February 3, 2001 due to the short maturity of
     these financial instruments.

     Short-term Borrowing and Long-Term Debt
     ---------------------------------------
          The fair value of the Company's debt is estimated based
     on quoted market prices for similar debt issues with the
     similar remaining maturities.  On February 2, 2002, the
     carrying value and estimated fair market value of the
     Company's debt was $51.2 million and $51.7 million,
     respectively. On February 3, 2001, the carrying value and
     estimated fair market value of the Company's debt was $59.7
     million and $60.1 million, respectively.

14.  CONTINGENCIES

          The Company is a defendant in various lawsuits arising
     in the ordinary course of business. It is the opinion of
     management that the ultimate liability, if any, resulting
     from such lawsuits will not materially affect the
     consolidated financial position or results of operations of
     the Company.

15.  JOINT VENTURE

          In October 1996, the Company announced it had completed
     a photofinishing joint venture with Eastman Kodak Company
     ("Kodak") whereby Kodak purchased new shares of a former
     subsidiary,  Fox Photo, Inc. ("Fox"), constituting 51% of the
     outstanding common stock of Fox for a cash purchase price of
     $56.1 million.  In October 1997, the Company further
     announced the termination of the photofinishing joint
     venture.  Pursuant to the termination, Kodak purchased the
     remaining 49% of Fox that it did not already own for a
     purchase price of $53.9 million that consisted of $10.0
     million in cash in consideration of the Company's agreement
     not to compete with Fox for two years (the  "Noncompete
     Agreement") and $43.9 million in the form of a note (the
     "Promissory Note") that matured and was paid on January 4,
     1999. The Noncompete Agreement with Kodak resulted in
     recording $3.2 million in 1999 as a component of other
     income.

                              62




















































ITEM 9.   CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE

          Not Applicable.












































                              63




                          PART III
                          --------

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
           PERSONS OF THE REGISTRANT

     Information required under this Item will be contained in
the Registrant's 2002 Proxy Statement, to be dated within 120 days
of the end of the Registrant's fiscal year 2001, is incorporated
herein by reference and will be delivered to stockholders
in connection with the Annual Shareholders meeting to be held on
June 6, 2002.


ITEM 11.  EXECUTIVE COMPENSATION

     Information required under this Item will be contained in
the Registrant's 2002 Proxy Statement, to be dated within 120 days
of the end of the Registrant's fiscal year 2001, is
incorporated herein by reference and will be delivered to
stockholders in connection with the Annual Shareholders meeting to
be held on June 6, 2002.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT

     Information required under this Item will be contained in
the Registrant's 2002 Proxy Statement, to be dated within 120 days
of the end of the Registrant's fiscal year 2001, is
incorporated herein by reference and will be delivered to
stockholders in connection with the Annual Shareholders meeting to
be held on June 6, 2002.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Not Applicable.
















                              64



PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K

(a) CERTAIN DOCUMENTS FILED AS PART OF FORM 10-K


                                                    PAGES
                                                    -----
(1.) FINANCIAL STATEMENTS
     --------------------
     - Independent Auditors' Report                    29
     - Consolidated Balance Sheets as of
        February 2, 2002 and February 3, 2001       30-31
     - Consolidated Statements of Operations for
        the fiscal years ended February 2, 2002,
        February 3, 2001 and February 5, 2000       32-33
     - Consolidated Statements of Changes in
        Stockholders' Equity for the fiscal
        years ended February 2, 2002 and
        February 3, 2001                            34-35
     - Consolidated Statements of Cash Flows for
        the fiscal years ended February 2, 2002,
        February 3, 2001 and February 5, 2000       36-37
     - Notes to Consolidated Financial Statements   38-62

(2.) FINANCIAL STATEMENT SCHEDULES
     -----------------------------
     - Schedule II, CPI Corp. Consolidated
        Allowance for Uncollectible Receivables
        Fiscal Years Ended February 2, 2002,
        February 3, 2001 and February 5, 2000          73

     All other schedules and notes under Regulation S-X are omitted
because they are either not applicable, not required or the
information called for therein appears in the consolidated
financial statements or notes thereto.












                              65


(3.) EXHIBITS FILED UNDER ITEM 601 OF REGULATION S-K
     -----------------------------------------------

     The exhibits listed below for CPI Corp. and its subsidiaries
("the Company"), with their corresponding filing date and
registration or Commission file numbers where applicable, are
incorporated by reference as exhibits required by Item 601 of
Regulation S-K:

(a)  EXHIBIT INDEX

EXHIBIT
NUMBER                         DESCRIPTION
--------  --------------------------------------------------------
(3.1)     Articles of Incorporation of the Company, incorporated
          by reference to CPI Corp.'s Annual Report for fiscal
          year 1989 on Form 10-K filed 4/30/90. File No. 1-10204

(3.2)     Bylaws of the Company, incorporated by reference to CPI
          Corp.'s Annual Report for fiscal year 1989 on Form 10-K
          filed 4/30/90.  File No. 1-10204

(3.4)     Amendment to Bylaws of the Company, incorporated by
          reference to CPI Corp.'s Form 8-K filed 8/18/95.
          File No. 0-11227

(3.5)     Amendment to Bylaws of the Company, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1996 on Form 10-K filed 5/2/97.  File No. 1-10204

(3.6)     Amendment to Bylaws of the Company, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1993 on Form 10-K filed 5/4/94.   File No. 1-10204

(4.1)     Articles of Incorporation and Bylaws of the Company,
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 1989 on Form 10-K filed 4/30/90.
          File No. 1-10204

(4.2)     Note Agreement for CPI Corp. Senior Notes dated
          June 16, 1997, incorporated by reference to CPI Corp.'s
          Form 8-K filed 7/1/97.  File No. 0-11227

(4.3)     CPI Corp. 7.46% Senior Notes due June 16, 2007, PPN
          12617# ACO, incorporated by reference to CPI Corp.'s
          Form 8-K filed 7/1/97.  File No. 0-11227

(4.4)     CPI Corp. 7.46% Senior Notes due June 16, 2007,
          Security No.!Inv5641!, incorporated by reference to CPI
          Corp.'s Form 8-K filed 7/1/97.  File No. 0-11227

(4.5)     Registration of CPI Corp. Preferred Stock Purchase
          Rights, incorporated by reference to CPI Corp.'s Form
          8-A12B filed 3/15/00.  File No. 1-10204

(10.1)    Registration of Securities on the New York Stock
          Exchange, incorporated by reference to CPI Corp.'s  Form
          8-A filed 3/21/89.

                              66

                        EXHIBIT INDEX (continued)

EXHIBIT
NUMBER                         DESCRIPTION
--------  --------------------------------------------------------
(10.6)    $30 Million Revolving Credit Note with Firstar Bank and
          Commerce Bank, incorporated by reference to CPI Corp.'s
          Form 10-Q filed 9/1/00.  File No. 1-10204

(10.7)    $10 Million Revolving Credit Note with Commerce Bank,
          incorporated by reference to CPI Corp.'s Form 10-Q
          filed 9/1/00.  File No. 1-10204

(10.8)    $20 Million Revolving Credit Note with Firstar Bank,
          incorporated by reference to CPI Corp.'s Form 10-Q
          filed 9/1/00.  File No. 1-10204

(10.9)    License Agreement Sears, Roebuck & Co., incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1998 on Form 10-K filed 5/5/99. File No. 1-10204

(10.10)   Second Amendment to License Agreement Sears, Roebuck &
          Co., incorporated by reference to CPI Corp.'s Form 10-Q
          filed 12/23/99.  File No. 1-10204

(10.11)   License Agreement Sears, Roebuck & Co. (Off Mall),
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 1998 on Form 10-K filed 5/5/99.
          File No. 1-10204

(10.12)   Second Amendment to License Agreement Sears, Roebuck &
          Co. (Off Mall), incorporated by reference to CPI Corp.'s
          Form 10-Q filed 12/23/99.  File No. 1-10204

(10.13)   License Agreement Sears, Roebuck De Puerto Rico, Inc.,
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 1998 on Form 10-K filed 5/5/99.
          File No. 1-10204

(10.14)   License Agreement Sears Canada, Inc., incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1998 on Form 10-K filed 5/5/99.   File No. 1-10204







(10.15)   Development and License Agreement between Sears,
          Roebuck and Co. and Consumer Programs, Incorporated,
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 2000 on Form 10-K filed 5/3/01.
          File No. 1-10204

(10.16)*  Employment Contract Alyn V. Essman, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1997 on Form 10-K filed 5/6/98.   File No. 1-10204

(10.17)   Retirement Agreement for Alyn V. Essman, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          2000 on Form 10-K filed 5/3/01.  File No. 1-10204

                              67

                          EXHIBIT INDEX (continued)

EXHIBIT
NUMBER                         DESCRIPTION
--------  --------------------------------------------------------

(10.18)*  Employment Contract for J. David Pierson, incorporated
          by reference to CPI Corp.'s Annual Report for fiscal
          year 2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.19)*  Employment Contract Russell H. Isaak, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1997 on Form 10-K filed 5/6/98.   File No. 1-10204

(10.20)*  Employment Contract for Russell A. Isaak, incorporated
          by reference to CPI Corp.'s Annual Report for fiscal
          year 2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.21)*  Employment Contract Patrick J. Morris, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1997 on Form 10-K filed 5/6/98.  File No. 1-10204

(10.22)*  Employment Contract for Patrick J. Morris, incorporated
          by reference to CPI Corp.'s Annual Report for fiscal
          year 2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.23)*  Employment Contract for Timothy F. Hufker, incorporated
          by reference to CPI Corp.'s Annual Report for fiscal
          year 2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.24)*  Employment Contract Barry C. Arthur, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1997 on Form 10-K filed 5/6/98.  File No. 1-10204

(10.25)*  Employment Contract Fran Scheper, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1997 on Form 10-K filed 5/6/98.  File No. 1-10204


(10.26)*  Employment Contract Jane E. Nelson, incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          1999 on Form 10-K filed 4/26/00.  File No. 1-10204

(10.27)   CPI Corp. Employees Profit Sharing Plan & Trust (As
          Amended and Restated Effective January 1, 1998),
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 1998 on Form 10-K filed 5/5/99.
          File No. 1-10204

(10.28)   First Amendment to CPI Corp. Employee Profit Sharing
          Plan & Trust (As Amended and Restated Effective
          January 1, 1998) (Effective January 1, 1999),
          incorporated by reference to CPI Corp.'s Annual Report
          for fiscal year 1998 on Form 10-K filed 5/5/99.
          File No. 1-10204

(10.29)   CPI Corp. 1981 Stock Bonus Plan (As Amended and Restated
          Effective 2/3/91), incorporated by reference to CPI
          Corp.'s Annual Report for fiscal year 1992 on
          Form 10-K filed 5/5/93.  File No. 1-10204

                              68


                          EXHIBIT INDEX (continued)

EXHIBIT
NUMBER                         DESCRIPTION
--------  --------------------------------------------------------

(10.30)   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 filed 5/3/01.  File No. 1-10204

(10.31)   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 filed 5/3/01.  File No. 1-10204

(10.32)   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 filed 5/3/01.   File No. 1-10204

(10.33)   CPI Corp. Restricted Stock Plan (As Amended and Restated
          Effective as of January 16, 1995),  incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.34)   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 filed 5/3/01.  File No. 1-10204

(10.35)   CPI Corp. Voluntary 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 filed 5/3/01.
          File No. 1-10204

(10.36)   CPI Corp. Key Executive Deferred Compensation Plan (As
          Amended and Restated June 6, 1996), incorporated by
          reference to CPI Corp.'s Annual Report for fiscal year
          2000 on Form 10-K filed 5/3/01.  File No. 1-10204

(10.37)   Stock Purchase Agreement By and Between Ridgedale Prints
          Plus, Inc. and TRU Retail, Inc., incorporated by
          reference to CPI Corp.'s Form 10-Q filed 6/8/01.  File
          No. 1-10204

(10.38)   First Amendment to Revolving Credit Agreement,
          incorporated by reference to CPI Corp.'s Form 10-Q filed
          8/31/01.  File No. 1-10204

(10.39)   Loan Agreement among TRU Retail, Inc., Prints Plus, Inc.
          and Consumer Programs Incorporated, incorporated by
          reference to CPI Corp.'s Form 10-Q filed 8/31/01.
          File No. 1-10204























                              69



                    EXHIBIT INDEX (continued)
EXHIBIT
NUMBER                         DESCRIPTION
-------   -------------------------------------------------------
(10.40)   Stock Purchase Agreement among Ridgedale Prints Plus,
          Inc., and TRU Retail, Inc., incorporated, incorporated
          by reference to CPI Corp.'s Form 10-Q filed 8/31/01.
          File No. 1-10204

(10.41)   Exhibit B, Certificate of Designation, Preferences and
          Rights of Series A Preferred Security of TRU Retail,
          Inc., incorporated by reference to CPI Corp.'s Form
          10-Q filed 8/31/01.  File No. 1-10204

(10.42)*  Employment Agreement by and between Jack Krings and CPI
          Corp., incorporated by reference to CPI Corp.'s Form
          10-Q filed 12/21/01.  File No. 1-10204

(10.43)   Second Agreement to Revolving Credit Agreement,
          incorporated by reference to CPI Corp.'s Form 10-Q filed
          12/21/01.  File No. 1-10204

* Employment contract is automatically renewed and extended for
  one year unless terminated by the Board of Directors or the
  employee.


The following exhibits are included in this 10-K Annual Report:

 (3.7)  By-law Amendment
(10.44) Third Amendment to Revolving Credit Agreement
(10.45) Consulting Agreement by and between CPI Corp. and Patrick
         J. Morris
(10.46) Retirement and Release Agreement by and between CPI Corp.
         and Russell Isaak
(10.47) Retirement and Release Agreement by and between CPI Corp.
         and Patrick J. Morris
(10.48) Centrics Technology, Inc. Stock Option Plan
(10.49) Fourth Amendment to Revolving Credit Agreement
(10.50) Employment Agreement by and between Gary W. Douglass and
         CPI Corp.
(11.1)  Computation of Earnings Per Share - Diluted
(11.2)  Computation of Earnings Per Share - Basic
(13.0)  2001 Annual Report to Shareholders
(21.0)  Subsidiaries of the Registrant
(23.0)  Independent Auditor's Consent





                              70



REPORTS ON FORM 8-K

     - On December 5, 2001, CPI Corp. reported the issuance of a
       press release on December 4, 2001 announcing the retirement
       of Russ Isaak, President, and Pat Morris, Senior Executive
       Vice President and President of the Company's Portrait
       Studio Division, effective February 2, 2002.

     - On December 12, 2001, CPI Corp. reported the issuance of a
       press release on December 11, 2001 announcing third quarter
       results.

     - On December 20, 2001, CPI Corp. announced the Company would
       begin a search for a new chief financial officer.

(c)  EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K

     - See Item 14(a)(3)

(d)  FINANCIAL STATEMENT SCHEDULE REQUIRED BY REGULATION S-X

     - See Item 14(a)(2)





























                              71


                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized on the 12th day of April, 2001.

                                   CPI CORP.

                                   BY: /s/  J. David Pierson
                                       -------------------------
                                       J. David Pierson
                                        Chairman, President, and
                                        Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated.

SIGNATURES OF DIRECTORS AND PRINCIPAL OFFICERS

     Signature                  Title                Date

/s/ J. David Pierson     Chairman, President, and  April 12, 2002
-----------------------  Director (Principal
   (J. David Pierson)    Executive Officer)

/s/ Lee Liberman         Director                  April 12, 2002
-----------------------
   (Lee Liberman)

/s/ Nicholas L. Reding   Director                  April 12, 2002
-----------------------
   (Nicholas L. Reding)

/s/ Martin Sneider       Director                  April 12, 2002
-----------------------
   (Martin Sneider)

/s/ Robert L. Virgil     Director                  April 12, 2002
-----------------------
   (Robert L. Virgil)

/s/ Gary W. Douglass     Executive Vice President, April 12, 2002
-----------------------  Finance and Chief
   (Gary W. Douglass)    Financial Officer
                         (Principal Financial
                         Officer)

/s/ Barry Arthur         Executive Vice President, April 12, 2002
-----------------------  Administration(Principal
   (Barry Arthur)        Accounting Officer)

                              72



        SCHEDULE II

                                VALUATION AND QUALIFYING ACCOUNTS

CPI CORP. CONSOLIDATED ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES
FISCAL YEARS ENDED
FEBRUARY 2, 2002, FEBRUARY 3, 2001 AND FEBRUARY 5, 2000 (in
thousands of dollars)
<TABLE>
<CAPTION>
                          Balance at    Charged to    Charged
           Balance
                          beginning     cost a        to other
           at end
                          of period     expense       accounts
Deductions   of period
Description
-----------               ---------     ----------    --------
----------   ---------
<S>                       <C>           <C>           <C>
<C>          <C>
Validation reserve
 deducted in the
 balance sheet from
 the asset to which
 it applies:

  Accounts receivable:
   2001 allowance for
    doubtful accounts     $  241        $  188        $    -     $
    -     $  429
   2000 allowance for
    doubtful accounts     $  287        $    -        $    -     $
   46     $  241
   1999 allowance for
    doubtful accounts     $  302        $    -        $    -     $
   15     $  287

</TABLE>
The majority of receivable amounts at year ending February 2, 2002,
February 3, 2001 and February 5, 2000, respectively are due from
portrait studio customers for amounts collected or to be collected,
for which the Company assumes all credit risks.

The majority of the allowance for uncollectible receivables is computed
and adjusted every four weeks based on a predetermined percentage of
the related receivable balances. These percentages are determined using
historical results adjusted for current economic conditions.  As a result,
the Company does not record separate additions or deductions to the
allowance for individual accounts but rather adjusts every four weeks for
the net change in the computed allowance based on gross receivable balances.

                                               73