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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-K**

**x**
** **

**o**

**CHARMING      SHOPPES, INC.**

|   | **PENNSYLVANIA**                                                              |   | **23-1721355**                                      |   |
|--------|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|   | (State                or other jurisdiction of incorporation or organization) |   | (I.R.S.                Employer Identification No.) |   |

|   | **450                WINKS LANE, BENSALEM, PA 19020**              |   | **(215)                245-9100**                                         |   |
|--------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|   | (Address                of principal executive offices) (Zip Code) |   | (Registrant’s                telephone number, including Area Code) |   |

|   | **Title                  of Each Class**                 |   | **Name                  of Each Exchange on Which Registered** |
|--------|----------------------------------------------------------|--------|----------------------------------------------------------------|
|   | Common                  Stock (par value $.10 per share) |   | The                  NASDAQ Stock Market LLC                   |
|   | Stock                  Purchase Rights                   |   | The                  NASDAQ Stock Market LLC                   |

**None**

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**Table          of Contents**

| Large                Accelerated Filer x | Accelerated                Filer o | Non-accelerated                Filer o |
|------------------------------------------|------------------------------------|----------------------------------------|

**DOCUMENTS      INCORPORATED BY REFERENCE**

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**Table          of Contents**

**CHARMING      SHOPPES, INC.**

**200**
**6      FORM 10-K ANNUAL REPORT**

**TABLE      OF CONTENTS**

|                   |                                                                                                                                              | **Page** |
|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                   | **PART                I**                                                                                                                         |     |
|                   |                                                                                                                                              |     |
| Item                1  | Business                                                                                                                                          | 1        |
|                   | General                                                                                                                                           | 1        |
|                   | Retail                Stores Segment                                                                                                              | 3        |
|                   | Direct-to-Consumer                Segment                                                                                                         | 7        |
|                   | Proprietary                Credit Programs                                                                                                        | 10       |
|                   | Competition                                                                                                                                       | 11       |
|                   | Employees                                                                                                                                         | 11       |
|                   | Trademarks                and Servicemarks                                                                                                        | 11       |
|                   | Executive                Offices                                                                                                                  | 12       |
|                   | Available                Information                                                                                                              | 12       |
| Item                1A | Risk                Factors                                                                                                                       | 12       |
|                   | Risks                Related to Our Business and Industry                                                                                         | 12       |
|                   | Other                Risks                                                                                                                        | 17       |
| Item                1B | Unresolved                Staff Comments                                                                                                          | 18       |
| Item                2  | Properties                                                                                                                                        | 18       |
| Item                3  | Legal                Proceedings                                                                                                                  | 20       |
| Item                4  | Submission                of Matters to a Vote of Security Holders                                                                                | 20       |
|                   | Additional                Part I Information - Our Executive Officers                                                                             | 20       |
|                   |                                                                                                                                              |     |
|                   | **PART                II**                                                                                                                        |     |
|                   |                                                                                                                                              |     |
| Item                5  | Market                for Registrant’s Common Equity, Related Stockholder Matters, and Issuer                Purchases of Equity Securities | 21       |
| Item                6  | Selected                Financial Data                                                                                                            | 24       |
| Item                7  | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations                         | 26       |
|                   | Forward-Looking                Statements                                                                                                         | 26       |
|                   | Overview                                                                                                                                          | 28       |
|                   | Critical                Accounting Policies                                                                                                       | 31       |
|                   | Results                of Operations                                                                                                              | 38       |
|                   | Financial                Condition                                                                                                                | 47       |
|                   | Market                Risk                                                                                                                        | 55       |
|                   | Impact                of Recent Accounting Pronouncements                                                                                         | 56       |
| Item                7A | Quantitative                and Qualitative Disclosures About Market Risk                                                                         | 56       |
| Item                8  | Financial                Statements and Supplementary Data                                                                                        | 56       |
|                   | Management’s                Report on Internal Control Over Financial Reporting                                                             | 56       |
|                   | Report                of Independent Registered Public Accounting Firm on Internal Control                over                Financial Reporting | 57       |
|                   | Report                of Independent Registered Public Accounting Firm                                                                            | 59       |
|                   | Consolidated                Balance Sheets                                                                                                        | 60       |
|                   | Consolidated                Statements of Operations and Comprehensive Income                                                                     | 61       |

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**Table          of Contents**

**(Continued)**

|                   |                                                                                                                         | **Page** |
|------------------------|------------------------------------------------------------------------------------------------------------------------------|----------|
|                   |                                                                                                                         |     |
| Item                8  | Financial                Statements and Supplementary Data (Continued)                                                       |     |
|                   | Consolidated                Statements of Stockholders’ Equity                                                         | 62       |
|                   | Consolidated                Statements of Cash Flows                                                                         | 63       |
|                   | Notes                to Consolidated Financial Statements                                                                    | 64       |
| Item                9  | Changes                In and Disagreements With Accountants on Accounting and Financial                Disclosure           | 106      |
| Item                9A | Controls                and Procedures                                                                                       | 106      |
| Item                9B | Other                Information                                                                                             | 106      |
|                   |                                                                                                                         |     |
|                   | **PART                III**                                                                                                  |     |
|                   |                                                                                                                         |     |
| Item                10 | Directors,                Executive Officers, and Corporate Governance                                                       | 107      |
| Item                11 | Executive                Compensation                                                                                        | 107      |
| Item                12 | Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Matters | 107      |
| Item                13 | Certain                Relationships and Related Transactions, and Director                Independence                      | 108      |
| Item                14 | Principal                Accountant Fees and Services                                                                        | 108      |
|                   |                                                                                                                         |     |
|                   | **PART                IV**                                                                                                   |     |
|                   |                                                                                                                         |     |
| Item                15 | Exhibits                and Financial Statement Schedules                                                                    | 109      |
|                   |                                                                                                                         |     |
|                   | Signatures                                                                                                                   | 120      |
|                   |                                                                                                                         |     |
|                   | Exhibit                Index                                                                                                 | 121      |

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**Table          of Contents**

**PART      I**

**Item      1. Business**

**GENERAL**

***LANE      BRYANT***
*®*

**-      **
**lanebryant.com**

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**Table          of Contents**

***LANE      BRYANT OUTLET***
*TM*

**-      **

***PETITE      SOPHISTICATE OUTLET***
*TM*

**petitesophisticate.com)**

***FASHION      BUG***
*®*

**fashionbug.com**

***CATHERINES      PLUS SIZES***
*®*

**catherines.com**

***CROSSTOWN      TRADERS***

**“Item      8. Financial Statements and Supplementary Data: Notes to Consolidated Financial      Statements; **
**NOTE      18. SEGMENT REPORTING**
**”**

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**Table          of Contents**

**RETAIL      STORES SEGMENT**

***Stores***

|                                                                                                                                                                             |   | **Year                Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                                                                                                             |   | **Feb.                3,**    |   | **Jan.                28,** |   | **Jan.                29,** |   |
|                                                                                                                                                                             |   | **2007**                      |   | **2006** |   | **2005** |   |
| **Store                Activity** **(1)****:**                                                                                                                              |   |                          |   |   |   |   |   |   |   |   |
| Number                of stores open at beginning of period                                                                                                                      |   |                          | 2,236  |   |   | 2,221 |   |   | 2,227 |   |
| Opened                during period                                                                                                                                              |   |                          | 198    | (2) |   | 70 |   |   | 51 |   |
| Closed                during period                                                                                                                                              |   |                          | (56    | ) |   | (55 | ) |   | (57 | ) |
| Number                of stores open at end of period                                                                                                                            |   |                          | 2,378  |   |   | 2,236 |   |   | 2,221 |   |
|                                                                                                                                                                             |   |                          |   |   |   |   |   |   |   |   |
| **Number                of Stores Open at End of Period by Brand:**                                                                                                              |   |                          |   |   |   |   |   |   |   |   |
| FASHION                BUG                                                                                                                                                       |   |                          | 1,009  |   |   | 1,025 |   |   | 1,028 |   |
| LANE                BRYANT                                                                                                                                                       |   |                          | 859    | (3) |   | 748 |   |   | 722 |   |
| CATHERINES                                                                                                                                                                       |   |                          | 465    |   |   | 463 |   |   | 471 |   |
| Other(4)                                                                                                                                                                         |   |                          | 45     |   |   | 0 |   |   | 0 |   |
| Number                of stores open at end of period                                                                                                                            |   |                          | 2,378  |   |   | 2,236 |   |   | 2,221 |   |
| ____________________                                                                                                                                                        |   |                          |   |   |   |   |   |   |   |   |
| *(1)* *Does                not include 2 outlet stores in Fiscal 2007 and 3 outlet stores in                Fiscal                2006 operated by Crosstown Traders, Inc.* |
| *(2)* *Includes                82 LANE BRYANT OUTLET stores and 45 PETITE SOPHISTICATE OUTLET                stores.*                                                       |
| *(3)* *Includes                82 LANE BRYANT OUTLET stores.*                                                                                                               |
| *(4)* *Includes                PETITE SOPHISTICATE OUTLET                stores.*                                                                                           |

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**Table          of Contents**

|                                                                                                                                                                   | **Openings** | **Closings** | **Relocations** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------------|-----------------|
|                                                                                                                                                                   |         |         |            |
| FASHION                BUG                                                                                                                                             | 10           | 18-22        | 20-25           |
| LANE                BRYANT                                                                                                                                             | 65-75(1)     | 15-18(2)     | 45-50(3)        |
| CATHERINES                                                                                                                                                             | 10           | 7-10         | 10-15           |
| Other(4)                                                                                                                                                               | 10-12        | 0            | 0               |
| Total                                                                                                                                                                  | 95-107       | 40-50        | 75-90           |
| ____________________                                                                                                                                              |         |         |            |
| *(1)* *Includes                approximately 35 LANE BRYANT intimate apparel side-by-side stores                and 15                LANE BRYANT OUTLET stores.* |
| *(2)* *Includes                1 LANE BRYANT OUTLET store.*                                                                                                       |
| *(3)* *Includes                approximately 32 conversions to LANE BRYANT Intimate Apparel side-by-side                stores.*                                  |
| *(4)* *Includes                5 PETITE SOPHISTICATE OUTLET stores and 5-7 full-line PETITE SOPHISTICATE                stores.*                                  |

***Merchandising      and Buying***

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**Table          of Contents**

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**Table          of Contents**

***Marketing      and Promotions***

**“Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations; **
**CRITICAL      ACCOUNTING POLICIES**
**;      **
***Revenue      Recognition***
**”**

***figure***
***figure***

***Sourcing***

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**Table          of Contents**

***Distribution      and Logistics***

**DIRECT-TO-CONSUMER      SEGMENT**

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**Table          of Contents**

***Merchandising      and Buying***

***Marketing      and Promotions***

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**Table          of Contents**

***Sourcing***

***Distribution      and Logistics***

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**Table          of Contents**

**PROPRIETARY      CREDIT      PROGRAMS**

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**Table          of Contents**

**“Item      7. Management’s Discussion and Analysis of **
**Financial      Condition and Results of Operations; **
**FINANCIAL      CONDITION**
**;      **
***Off-Balance-Sheet      Arrangements***
**”**
**“Item      8. Financial Statements and Supplementary Data: Notes to Consolidated Financial      Statements; **
**NOTE      16. ASSET SECURITIZATION**
**”**

**COMPETITION**

**EMPLOYEES**

**TRADEMARKS      AND SERVICEMARKS**

**catherines.com,      charming.com, charmingshoppes.com, fashionbug.com, fashionbugcard.com,      fashionbugplus.com, figuremag.com, lanebryant.com, petitesophisticate.com,      figis.com, bedfordfair.com, brownstonestudio.com, cowardshoe.com,      intimateappeal.com, lewmagram.com, willowridgecatalog.com, oldpueblotraders.com,      regaliaonline.com, shoetrader.com, shopthebay.com **

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**Table          of Contents**

**EXECUTIVE      OFFICES**

**AVAILABLE      INFORMATION**

**www.charmingshoppes.com**
**www.sec.gov**
**“PART      III**
**Item      10. Directors, Executive Officers, and Corporate      Governance”**

**Item      1A. Risk Factors**

**“Item      7. Management’s Discussion and Analysis of **
**Financial      Condition and Results of Operations”**

**RISKS      RELATED TO OUR BUSINESS AND INDUSTRY**

***Our      business is dependent upon our ability to accurately predict rapidly changing      fashion trends, customer preferences, and other fashion-related      factors.***

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**Table          of Contents**

***Existing      and increased competition in the women's retail apparel and direct-to-consumer      markets may reduce our net revenues, profits, and market      share.***

***A      slowdown in the United States economy, an uncertain economic outlook, and      escalating energy costs could lead to reduced consumer demand for our products      in the future.***

***Maintaining      and improving our operating margins is dependent on our ability to successfully      control our operating costs.***

***We      may not be able to obtain sufficient working capital      financing.***

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**Table          of Contents**

***Our      operating results fluctuate from season to season.***

***We      face challenges in managing our recent growth.***

***We      depend on key personnel and may not be able to retain or replace these employees      or recruit additional qualified personnel.***

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**Table          of Contents**

***Our      business plan is largely dependent upon continued growth in the plus-size      women’s apparel market.***

***We      could be materially and adversely affected if any of our distribution or      fulfillment centers are shut down.***

***Natural      disasters, war, acts of terrorism or other armed conflict, or the threat of      either on the United States or international economies may negatively impact      the      availability of merchandise and otherwise adversely impact our      business.***

***Our      inability to successfully manage customer service or fulfillment for our      E-commerce websites or our catalog business could adversely impact our operating      results.***

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**Table          of Contents**

***We      rely on foreign sources of production.***

| ●  | political                instability;                                                                             |
|---------------|------------------------------------------------------------------------------------------------------------------------|
| ●       | increased                security requirements applicable to imported goods;                                      |
| ●       | trade                restrictions;                                                                                |
| ●       | imposition                of, or changes in, duties, quotas, taxes, and other charges on                imports;  |
| ●       | currency                and exchange risks;                                                                       |
| ●       | issues                relating to compliance with domestic or international labor                standards;       |
| ●       | concerns                over anti-dumping;                                                                        |
| ●       | delays                in shipping; or                                                                             |
| ●       | increased                costs of transportation.                                                                 |

***Issues      of global workplace conditions may adversely affect our      business.***

***We      depend on strip shopping center and mall traffic and our ability to identify      suitable store locations for our Retail Stores      segment.***

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**Table          of Contents**

***We      may be unable to protect our trademarks and other intellectual property rights.***

**OTHER      RISKS**

***Anti-takeover      provisions in our governing documents and Pennsylvania law may discourage other      companies from attempting to acquire us.***

| ●  | classify                our board into three classes, with one class being elected each                year;                                                                                                                                             |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ●       | do                not permit cumulative voting;                                                                                                                                                                                                          |
| ●       | permit                our board to issue "blank check" preferred stock without shareholder                approval;                                                                                                                                      |
| ●       | require                certain advance notice procedures with regard to the nomination of                candidates for election as directors, other than nominations by or                at the                direction of our board;                 |
| ●       | prohibit                us from engaging in some types of business combinations with a holder                of                10% or more of our voting securities without super-majority shareholder                or                board approval;  |
| ●       | prevent                our directors from being removed without cause except upon super-majority                shareholder approval; and                                                                                                                |
| ●       | prevent                a holder of 20% or more of our common stock from taking certain actions                without certain approvals.                                                                                                                      |

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**Table          of Contents**

***Failure      to comply with the provisions of the Sarbanes-Oxley Act of 2002 could adversely      affect our business.***

***New      accounting rules or regulations or changes in existing rules or regulations      could adversely impact our reported results of      operations.***

***Changes      in estimates related to our property, plant, equipment, goodwill, or intangible      assets could adversely affect our reported results of      operations.***

**Item      1B. Unresolved Staff Comments**

**Item      2. Properties**

**“Item      8. Financial Statements and Supplementary Data: Notes to Consolidated Financial      Statements; **
**NOTE      17. LEASES**
**”**

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**Table          of Contents**

| **Period**                                                                               | **Number                of****Leases                Expiring**(1) |
|------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
|                                                                                     |                                                              |
| 2007                                                                                     |                    174(2)                     |
| 2008                - 2012                                                               | 654                                                               |
| 2013                - 2017                                                               | 506                                                               |
| 2018                - 2022                                                               | 539                                                               |
| 2023                - 2027                                                               | 423                                                               |
| 2028                - 2032                                                               |  64                                                          |
| Thereafter                                                                               |  15                                                          |
| ____________________                                                                |
| *(1)* *Excludes                2 Crosstown Traders outlet stores.*                  |
| *(2)* *Includes                133 stores on month-to-month                leases.* |

| **Size                in**                     |                              | **Leased/** |                                                                                                                               |
|------------------------------------------------|-----------------------------------|-------------|------------------------------------------------------------------------------------------------------------------------------------|
| **Sq.                Feet**                    | **Location**                      | **Owned**   | **Description**                                                                                                                    |
|                                           |                              |        |                                                                                                                               |
| 1,000,000                                      | Greencastle,                IN    | Owned       | FASHION                BUG, LANE BRYANT OUTLET, and PETITE SOPHISTICATE OUTLET distribution                center                  |
|                   393,000            | White                Marsh, MD    | Owned       | LANE                BRYANT and CATHERINES distribution center                                                                      |
|                   288,000            | Tucson,                AZ         | Leased      | Crosstown                Traders distribution center                                                                     |
|                   240,000            | Wilmington,                NC     | Leased      | Crosstown                Traders distribution center                                                                               |
|                   213,000            | Memphis,                TN        | Owned       | Warehouse                facility (currently leased to a third party)                                                              |
|                   145,000            | Bensalem,                PA       | Owned       | Corporate                technology center, outlet operations, and corporate administrative                offices                 |
|                   142,000            | Bensalem,                PA       | Leased      | Corporate                headquarters and FASHION BUG home office                                                                  |
|                   135,000            | Columbus,                OH       | Leased      | LANE                BRYANT home office                                                                                             |
|                   125,000            | Marshfield,                WI     | Owned       | Crosstown                Traders distribution center                                                                               |
|                   122,000            | Stevens                Point, WI  | Leased      | Crosstown                Traders distribution and call centers                                                                     |
|                   108,000            | Tucson,                AZ         | Leased      | Crosstown                Traders distribution center                                                                               |
|                     71,000 | Marshfield,                WI     | Owned       | Crosstown                Traders warehouse                                                                                         |
|                     64,000 | Marshfield,                WI     | Owned       | Crosstown                Traders administrative offices and call center                                                            |
|                     63,000 | Memphis,                TN        | Owned       | CATHERINES                home office                                                                                              |
|                     52,000 | Tucson,                AZ         | Leased      | Crosstown                Traders offices                                                                                           |
|                     46,000 | Neillsville,                WI    | Owned       | Crosstown                Traders distribution center                                                                               |
|                     40,000 | Marshfield,                WI     | Owned       | Crosstown                Traders warehouse                                                                                         |
|                     36,000 | Tucson,                AZ         | Leased      | Crosstown                Traders offices                                                                                           |
|                     30,000 | Miami                Township, OH | Leased      | Spirit                of America National Bank (our wholly-owned credit card bank subsidiary)                and credit operations |
|                     23,000 | Hong                Kong, PRC     | Owned       | International                sourcing offices                                                                                      |
|                     17,000 | New                York, NY       | Leased      | E-commerce                operations                                                                                               |
|                     16,000 | Marshfield,                WI     | Owned       | Crosstown                Traders manufacturing facility                                                                            |
|                     15,000 | Tucson,                AZ         | Leased      | Crosstown                Traders offices                                                                                           |

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**Table          of Contents**

**Item      3. Legal Proceedings**

**Item      4. Submission of Matters to a Vote of Security Holders**

**Additional      Part I Information - Our Executive      Officers**

**Dorrit      J. Bern**

**Joseph      M. Baron**

**James      G. Bloise**

**Michel      Bourlon**

**Anthony      A. DeSabato**

**Eric      M. Specter**
**-      **

**Colin      D. Stern**

**Gale      H. Varma,**

**John      J. Sullivan**
**-      **

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**Table          of Contents**

**PART      II**

**Item      5.****Market      for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer      Purchases of Equity Securities**

|                       |   | **Fiscal                200****7** |   | **Fiscal                2006** |   |
|----------------------------|--------|------------------------------------|--------|--------------------------------|--------|
|                       |   | **High**                           |   | **Low**                        |   | **High** |   | **Low** |   |
|                       |   |                               |   |                           |   |   |   |   |   |   |   |   |   |
| 1st                Quarter |   | $                                  | 15.18  |                           | $      | 11.90 |   | $ | 9.03 |   | $ | 7.04 |   |
| 2nd                Quarter |   |                               | 14.90  |                           |   | 9.97 |   |   | 12.25 |   |   | 7.00 |   |
| 3rd                Quarter |   |                               | 15.35  |                           |   | 9.69 |   |   | 12.34 |   |   | 9.69 |   |
| 4th                Quarter |   |                               | 15.57  |                           |   | 12.30 |   |   | 14.07 |   |   | 10.86 |   |

**“Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations; **
**FINANCIAL      CONDITION**
**;      Financing; **
***Long-term      Debt and Equity Financing***
**”**
**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT**
**”**

**“Item      12. Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters”**

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**Table          of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   | **Total**                           |   | **Maximum**                        |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|-------------------------------|--------|-------------------------------------|--------|------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   | **Number**                          |   | **Number                of**       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   | **of                Shares**        |   | **Shares                that**     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **Total**                    |   |                          |   | **Purchased                as**     |   | **May                Yet be**      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **Number**                   |   | **Average**                   |   | **Part                of Publicly** |   | **Purchased**                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **of                Shares** |   | **Price                Paid** |   | **Announced                Plans**  |   | **Under                the Plans** |   |
| **Period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Purchased****(1)**         |   | **per                Share**  |   | **or                Programs(2)**   |   | **or                Programs(2)**  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   |                                |   |                               |   |   |   |   |   |
| October                  29, 2006 through November 25, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                         | 2,057  |                          | $      | 14.80                               |   |                               | -      |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   |                                |   |                               |   |   |   |   |   |
| November                  26, 2006 through December 30, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                         | 0      |                          |   | 00.00                               |   |                               | -      |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                         |   |                          |   |                                |   |                               |   |   |   |   |   |
| December                  31, 2006 through February 3, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                         | 1,344  |                          |   | 13.12                               |   |                               | -      |   |   |   |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                         | 3,401  |                          | $      | 14.14                               |   |                               | -      |   |   |   |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         |   |                          |   |                                |   |                               |   |   |   |   |   |
| *(1)* *Shares                withheld for the payment of payroll taxes on employee stock awards                that                vested during the period.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| *(2(2)* *In                Fiscal 1998, we publicly announced that our Board of Directors granted                authority to repurchase up to 10,000,000 shares of our common stock.                In                Fiscal 2000, we publicly announced that our Board of Directors granted                authority to repurchase up to an additional 10,000,000 shares of                our                common stock. In Fiscal 2003, the Board of Directors granted an additional                authorization to repurchase 6,350,662 shares of common stock issued                to                Limited Brands in connection with our acquisition of LANE BRYANT.                From                Fiscal 1998 through Fiscal 2003, we repurchased a total of 21,370,993                shares of common stock, which included shares purchased on the open                market                as well as shares repurchased from Limited Brands. As of February                3, 2007,                4,979,669 shares of our common stock remain available for repurchase                under                these programs. Our revolving credit facility allows the repurchase                of our                common stock subject to maintaining a minimum level of Excess Availability                (as defined in the facility agreement) for 30 days before and immediately                after such repurchase. As conditions may allow, we may from time                to time                acquire additional shares of our common stock under these programs.                Such                shares, if purchased, would be held as treasury shares. No shares                were                acquired under these programs during the fourteen weeks ended February                3,                2007. The repurchase programs have no expiration                date.* |

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**Table          of Contents**

|                                                    |   | 2/2/02 |   | 2/1/03 |   | 1/31/04 |   | 1/29/05 |   | 1/28/06 |   | 2/3/07 |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|---------|--------|---------|--------|--------|--------|
| Charming                Shoppes, Inc.                   |   | $      | 100    |   | $      | 60      |   | $       | 105    |    | $      | 144    |   | $ | 225 |   | $ | 236 |   |
| Russell                2000 Composite Index             |   |   | 100    |   |   | 138     |   |    | 144    |    |   | 154    |   |   | 186 |   |   | 208 |   |
| Dow                Jones U.S. Retailers - Apparel Index |   |   | 100    |   |   | 87      |   |    | 116    |    |   | 140    |   |   | 160 |   |   | 193 |   |

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**Table          of Contents**

**Item      6. Selected Financial Data**

**“Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations”**
**“Item      8. Financial Statements and Supplementary Data.”**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**FIVE-YEAR      COMPARATIVE SUMMARY**

|                                                                          |   | **Year                Ended** |      |
|-------------------------------------------------------------------------------|--------|-------------------------------|-----------|
|                                                                          |   | **Feb.                3,**    |      | **Jan.                28,** |   | **Jan.                29,** |   | **Jan.                31,** |   | **Feb.                1,** |   |
| **(Dollars                in thousands, except per share amounts)**           |   | **2007****(1)(2)**            |      | **2006****(1)(3)** |   | **2005** |   | **2004** |   | **2003** |   |
|                                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                Statement Data:**                                  |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                 |   | $                             | 3,067,517 |   | $ | 2,755,725 |   | $ | 2,334,736 |   | $ | 2,288,363 |   | $ | 2,413,356 |   |
|                                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                of goods sold, buying, catalog, and                       |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| occupancy                expenses                                             |   |                          | 2,141,884 |   |   | 1,914,347 |   |   | 1,642,650 |   |   | 1,645,499 |   |   | 1,727,253 |   |
| Selling,                general, and administrative expenses             |   |                          | 753,109   |   |   | 678,753 |   |   | 577,301 |   |   | 558,248 |   |   | 603,502 |   |
| Expenses                related to cost reduction plan                   |   |                          | 0         |   |   | 0 |   |   | 605 | (4) |   | 11,534 | (4) |   | 0 |   |
| Restructuring                charge (credit)                             |   |                          | 0         |   |   | 0 |   |   | 0 |   |   | 0 |   |   | (4,813 | )(5) |
| Total                operating expenses                                  |   |                          | 2,894,993 |   |   | 2,593,100 |   |   | 2,220,556 |   |   | 2,215,281 |   |   | 2,325,942 |   |
| Income                from operations                                    |   |                          | 172,524   |   |   | 162,625 |   |   | 114,180 |   |   | 73,082 |   |   | 87,414 |   |
| Other                income                                              |   |                          | 8,345     |   |   | 7,687 |   |   | 3,098 |   |   | 2,050 |   |   | 2,328 |   |
| Interest                expense                                          |   |                          | (14,746   | ) |   | (17,911 | ) |   | (15,610 | ) |   | (15,609 | ) |   | (20,292 | ) |
| Income                before income taxes, minority interest,                 |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                cumulative effect of accounting changes                    |   |                          | 166,123   |   |   | 152,401 |   |   | 101,668 |   |   | 59,523 |   |   | 69,450 |   |
| Income                tax provision                                      |   |                          | 57,200    |   |   | 53,010 |   |   | 37,142 |   |   | 21,623 |   |   | 27,117 |   |
| Income                before minority interest and cumulative                 |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| effect                of accounting changes                                   |   |                          | 108,923   |   |   | 99,391 |   |   | 64,526 |   |   | 37,900 |   |   | 42,333 |   |
| Minority                interest in net loss of consolidated subsidiary  |   |                          | 0         |   |   | 0 |   |   | 0 |   |   | 142 |   |   | 679 |   |
| Cumulative                effect of accounting changes, net of tax       |   |                          | 0         |   |   | 0 |   |   | 0 |   |   | 0 |   |   | (49,098 | )(6) |
| Net                income (loss)                                         |   | $                             | 108,923   |   | $ | 99,391 |   | $ | 64,526 |   | $ | 38,042 |   | $ | (6,086 | ) |
|                                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                net income (loss) per share:                             |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Before                cumulative effect of accounting changes                 |   | $                             | .89       |   | $ | .83 |   | $ | .56 |   | $ | .34 |   | $ | .38 |   |
| Net                income (loss)                                              |   |                          | .89       |   |   | .83 |   |   | .56 |   |   | .34 |   |   | (.05 | ) |
| Basic                weighted average common shares outstanding          |   |                          | 122,388   |   |   | 119,831 |   |   | 116,196 |   |   | 112,491 |   |   | 113,810 |   |
|                                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                net income (loss) per share:                           |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Before                cumulative effect of accounting changes                 |   | $                             | .81       |   | $ | .76 |   | $ | .52 |   | $ | .33 |   | $ | .36 |   |
| Net                income (loss)                                              |   |                          | .81       |   |   | .76 |   |   | .52 |   |   | .33 |   |   | (.01 | ) |
| Diluted                weighted average common shares and                     |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| equivalents                outstanding                                        |   |                          | 139,763   |   |   | 137,064 |   |   | 133,174 |   |   | 128,558 |   |   | 130,937 |   |
|                                                                          |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**FIVE-YEAR      COMPARATIVE SUMMARY**

**(Continued)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **Year                Ended** |      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|
| **(Dollars                in thousands)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Feb.                3,**    |      | **Jan.                28,** |   | **Jan.                29,** |   | **Jan.                31,** |   | **Feb.                1,** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **2007****(1)(2)**            |      | **2006****(1)** |   | **2005** |   | **2004** |   | **2003** |   |
| **Balance                Sheet Data:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                             | 1,710,942 |   | $ | 1,572,583 |   | $ | 1,303,771 |   | $ | 1,173,070 |   | $ | 1,139,564 |   |
| Current                portion - long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          | 10,887    |   |   | 14,765 |   |   | 16,419 |   |   | 17,278 |   |   | 12,595 |   |
| Long-term                debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                          | 181,124   |   |   | 191,979 |   |   | 208,645 |   |   | 202,819 |   |   | 203,045 |   |
| Working                capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                          | 443,101   |   |   | 344,229 |   |   | 413,989 |   |   | 266,178 |   |   | 190,797 |   |
| Stockholders’                equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                          | 947,538   |   |   | 814,348 |   |   | 694,464 |   |   | 587,409 |   |   | 546,555 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Performance                Data:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Including                cumulative effect of accounting changes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                return on average stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          | 12.4      | % |   | 13.2 | % |   | 10.1 | % |   | 6.7 | % |   | (1.1 | )% |
| Net                return on average total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                          | 6.6       |   |   | 6.9 |   |   | 5.2 |   |   | 3.3 |   |   | (0.5 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Before                cumulative effect of accounting changes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                return on average stockholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                          | 12.4      | % |   | 13.2 | % |   | 10.1 | % |   | 6.7 | % |   | 7.6 | % |
| Net                return on average total assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                          | 6.6       |   |   | 6.9 |   |   | 5.2 |   |   | 3.3 |   |   | 3.7 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                          |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *(1)* *Includes                the results of operations of Crosstown Traders, Inc. from the date                of                acquisition (June 2, 2005).*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| *(2)* *Fiscal                2007 consisted of 53 weeks.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *(3)* *Certain                prior-year amounts have been reclassified to conform to the current-year                presentation.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| *(4)* *In                March 2003, we announced a cost reduction plan designed to take advantage                of the centralization of corporate administrative services and to                realize                certain efficiencies, in order to improve profitability.**Costs                incurred in connection with the plan during Fiscal 2004 included                $2,980,000 of workforce reduction costs, $3,691,000 of lease termination                and related costs, $4,195,000 of accelerated depreciation (a non-cash                charge), and $668,000 of other facility closure costs. The cost reduction                plan was substantially completed during Fiscal 2004. During Fiscal                2005,                we revised the estimated sublease income on our Hollywood, Florida                credit                facility, which was closed in connection with the plan, and recognized                an                additional $605,000 of lease termination costs.*                                      |
| *(5)* *In                January 2002, our Board of Directors approved a restructuring plan                that                included the closing of our THE ANSWER/ADDED DIMENSIONS chain of                77                stores; the conversion of approximately 20% of the ADDED DIMENSIONS                stores                to CATHERINES stores; the closing of 130 under-performing FASHION                BUG                stores; and the conversion of 44 FASHION BUG stores to LANE BRYANT                stores.                This restructuring plan resulted in a pre-tax charge of $37,708,000                in                Fiscal 2002. We completed the restructuring plan by the end of Fiscal                2003, and recognized a pre-tax restructuring credit of $4,813,000,                primarily as a result of favorable negotiations of lease                terminations.*                                                                                                                                                   |
| *(6)* *In                Fiscal 2003, we fully adopted the provisions of SFAS No. 142, “Goodwill                and Other Intangible Assets.” In accordance with the transition provisions                of SFAS No. 142, we tested goodwill related to our CATHERINES acquisition                for impairment, and recorded a write-down of $43,975,000 to reduce                the                carrying value of the goodwill to its estimated fair value. In addition,                we recognized a charge of $5,123,000, net of income taxes of $2,758,000,                in connection with the adoption of FASB Emerging Issues Task Force                (“EITF”) Issue 02-16, “Accounting by a Customer (Including a Reseller) for                Certain Consideration Received from a Vendor.****”****This                charge represents a reduction in inventory cost for the cumulative                effect                of cash received from vendors as of the beginning of Fiscal                2003.* |

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**Table          of Contents**

**Item      7. Management’s Discussion and Analysis of Financial      Condition and Results of Operations**

**FORWARD-LOOKING      STATEMENTS**

**“Item      1A. Risk Factors,”**

| ●  | Our                business is dependent upon our ability to accurately predict rapidly                changing fashion trends, customer preferences, and other fashion-related                factors, which we may not be able to successfully accomplish in the                future.                                                                                                                            |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ●       | A                slowdown in the United States economy, an uncertain economic outlook,                and                escalating energy costs could lead to reduced consumer demand for                our                products in the future.                                                                                                                                                                 |
| ●       | The                women’s specialty retail apparel and direct-to-consumer markets are highly                competitive and we may be unable to compete successfully against                existing                or future competitors.                                                                                                                                                                    |
| ●       | We                may be unable to successfully integrate the operations of Crosstown                Traders, Inc. (“Crosstown Traders”) with the operations of Charming                Shoppes, Inc. In addition, we cannot assure the successful implementation                of our business plan for Crosstown Traders, including the successful                launch of our LANE BRYANT catalog.  |
| ●       | We                cannot assure the successful implementation of our business plans                for                entry into the outlet store distribution channel and expansion of                our                CACIQUE product line through new store formats.                                                                                                                                            |
| ●       | We                cannot assure the successful implementation of our business plan                for                increased profitability and growth in our Retail Stores or                Direct-to-Consumer segments.                                                                                                                                                                                          |
| ●       | Our                business plan is largely dependent upon continued growth in the plus-size                women’s apparel market, which may not occur.                                                                                                                                                                                                                                                       |

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**Table          of Contents**

| ● | We                depend on key personnel, particularly our Chief Executive Officer,                Dorrit                J. Bern, and we may not be able to retain or replace these employees                or                recruit additional qualified personnel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | We                depend on our distribution and fulfillment centers and third-party                freight                consolidators and service providers, and could incur significantly                higher                costs and longer lead times associated with distributing our products                to                our stores and shipping our products to our E-commerce and catalog                customers if operations at any of these locations were to be disrupted                for                any reason.                                                                                                                                                                                                     |
| ● | We                depend on the availability of credit for our working capital needs,                including credit we receive from our suppliers and their agents,                and on                our credit card securitization facilities. If we were unable to obtain                sufficient financing at an affordable cost, our ability to merchandise                our                stores, E-commerce, or catalog businesses would be adversely                affected.                                                                                                                                                                                                                                                      |
| ● | Natural                disasters, as well as war, acts of terrorism, or other armed conflict,                or                the threat of either may negatively impact availability of merchandise                and                customer traffic to our stores, or otherwise adversely affect our                business.                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ● | We                rely significantly on foreign sources of production and face a variety                of                risks generally associated with doing business in foreign markets                and                importing merchandise from abroad. Such risks include (but are not                necessarily limited to) political instability; imposition of, or                changes                in, duties or quotas; trade restrictions; increased security requirements                applicable to imports; delays in shipping; increased costs of                transportation; and issues relating to compliance with domestic or                international labor standards.                                        |
| ● | Our                Retail Stores and Direct-to-Consumer segments experience seasonal                fluctuations in net sales and operating income. Any decrease in sales                or                margins during our peak sales periods, or in the availability of                working                capital during the months preceding such periods, could have a material                adverse effect on our business. In addition, extreme or unseasonable                weather conditions may have a negative impact on our sales.                                                                                                                                                                                             |
| ● | We                may be unable to obtain adequate insurance for our operations at                a                reasonable cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ● | We                may be unable to protect our trademarks and other intellectual property                rights, which are important to our success and our competitive position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | We                may be unable to hire and retain a sufficient number of suitable                sales                associates at our stores. In addition, we are subject to the Fair                Labor                Standards Act and various state and Federal laws and regulations                governing                such matters as minimum wages, exempt status classification, overtime,                and                employee benefits. Changes in Federal or state laws or regulations                regarding minimum wages or other employee benefits could cause us                to incur                additional wage and benefit costs, which could adversely affect our                results of operations.  |
| ● | Our                manufacturers may be unable to manufacture and deliver merchandise                to us                in a timely manner or to meet our quality standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ● | Our                Retail Stores segment sales are dependent upon a high volume of traffic                in                the strip centers and malls in which our stores are located, and                our                future retail store growth is dependent upon the availability of                suitable                locations for new stores.                                                                                                                                                                                                                                                                                                                                                                                     |
| ● | Inadequate                systems capacity, a disruption or slowdown in telecommunications                services,                changes in technology, changes in government regulations, systems                issues,                security breaches, a failure to integrate order management systems,                or                customer privacy issues could result in reduced sales or increases                in                operating expenses as a result of our efforts or our inability to                remedy                such issues.                                                                                                                                                                              |

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**Table          of Contents**

| ● | Successful                operation of our E-commerce websites and our catalog business is                dependent                on our ability to maintain efficient and uninterrupted customer service                and fulfillment operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | We                may be unable to manage significant increases in certain costs vital                to                catalog operations, including postage, paper, and acquisition of                prospects, which could adversely affect our results of                operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ● | Response                rates to our catalogs and access to new customers could decline,                which                would adversely affect our net sales and results of                operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ● | We                may be unable to successfully implement our plan to improve merchandise                assortments in our Retail Stores or Direct-to-Consumer                segments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ● | We                make certain significant assumptions, estimates, and projections                related                to the useful lives of our property, plant, and equipment and the                valuation of intangible assets related to acquisitions. The carrying                amount and/or useful life of these assets are subject to periodic                valuation tests for impairment. Impairment results when the carrying                value                of an asset exceeds the undiscounted (or for goodwill and indefinite-lived                intangible assets the discounted) future cash flows associated with                the                asset. If actual experience were to differ materially from the                assumptions, estimates, and projections used to determine useful                lives or                the valuation of property, plant, equipment, or intangible assets,                a                write-down for impairment of the carrying value of the assets, or                acceleration of depreciation or amortization of the assets, could                result.                Such a write-down or acceleration of depreciation or amortization                would                have an adverse impact on our reported results of operations.                                              |
| ● | Changes                to existing accounting rules or the adoption of new rules could have                an                adverse impact on our reported results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ● | Pursuant                to Section 404 of the Sarbanes-Oxley Act of 2002, we are required                to                include our assessment of the effectiveness of our internal control                over                financial reporting in our annual reports. Our independent registered                public accounting firm is also currently required to attest to whether                or                not our assessment is fairly stated in all material respects and                to                separately report on whether or not they believe that we maintained,                in                all material respects, effective internal control over financial                reporting. If we are unable to maintain effective internal control                over                financial reporting, or if our independent registered public accounting                firm is unable to timely attest to our assessment, we could be subject                to                regulatory sanctions and a possible loss of public confidence in                the                reliability of our financial reporting. Such a failure could result                in our                inability to provide timely and/or reliable financial information                and                could adversely affect our                business. |

**OVERVIEW**

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**Table          of Contents**

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**Table          of Contents**

*      (*
*Source:      American Obesity Association: Obesity in the U.S. Fact Sheet)*
*      (Source: NPD Group)*

***figure***

|   | · | Continued                expansion of our side-by-side LANE BRYANT intimate apparel store                concept,                which we successfully tested during Fiscal 2006 and implemented in                Fiscal                2007. This concept pairs LANE BRYANT’s casual and wear-to-work sportswear                assortments with an expanded line of CACIQUE                intimates, as well as additional national brands, presented in a                double                store-front. During Fiscal 2007, we operated 44 stores in the side-by-side                format, including 18 stores that were relocated or remodeled. During                Fiscal 2008, we plan to open approximately 60 new LANE BRYANT stores,                including 35 stores in the new side-by-side                format. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    | · | In                Fiscal 2007, we entered the outlet store channel through the assumption                of                outlet store leases from Retail Brand Alliance and the opening of                82 LANE                BRYANT OUTLET stores and 45 PETITE SOPHISTICATE OUTLET stores, many                of                which are operating as side-by-side stores with LANE BRYANT OUTLET                stores.                This channel, which we expected would incur an operating loss during                Fiscal 2007, performed above-plan, was profitable during the fourth                quarter, and broke even for Fiscal 2007. During Fiscal 2008, we plan                to                open approximately 15 new LANE BRYANT OUTLET stores (including 3                conversions from LANE BRYANT stores), 5 new PETITE SOPHISTICATE OUTLET                stores, and 5-7 new full-line PETITE SOPHISTICATE                stores. |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                our Direct-to-Consumer segment, we                will focus on building infrastructure to prepare for the launch of                the                LANE BRYANT catalog, as well as improving the performance of our                core                apparel group catalogs. The LANE BRYANT catalog trademark, currently                licensed by a third party, will revert to us in late Fiscal                2008. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Table          of Contents**

|   | · | In                addition, we are planning for continued growth in E-commerce and                cross-channel selling tools, and exploring opportunities for international                expansion. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CRITICAL      ACCOUNTING POLICIES**

***Revenue      Recognition***

*“Revenue      Recognition.”*

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**Table          of Contents**

***Accounts      Receivable***

***Inventories***

***“***
***Accounting      for Cash Consideration Received From a Vendor”***

***Deferred      Catalog Advertising Costs***

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**Table          of Contents**

***Impairment      of Property, Plant, and Equipment, Goodwill, and Intangible Assets***

*“Accounting      for the Impairment or Disposal of Long-Lived Assets*
*”*

*“Goodwill      and Other Intangible Assets.”*

***Acquisitions      - Purchase Price Allocation***

*“Business      Combinations.”*

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**Table          of Contents**

***Asset      Securitization***

**“**
**Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      16. ASSET SECURITIZATION**
**”**

*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,”*

| **(In                millions)**                 |   | **10%                Change** |   | **20%                Change** |   |
|--------------------------------------------------|--------|-------------------------------|--------|-------------------------------|--------|
|                                             |   |                          |   |                          |   |   |   |
| **Assumption:**                                  |   |                          |   |                          |   |   |   |
| Payment                rate                      |   | $                             | 1.1    |                          | $      | 2.1 |   |
| Residual                cash flows discount rate |   |                          | 0.1    |                          |   | 0.1 |   |
| Credit                loss percentage            |   |                          | 0.9    |                          |   | 1.7 |   |

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**Table          of Contents**

***Costs      Associated With Exit or Disposal Activities***

*“Accounting      for Costs Associated with Exit or Disposal Activities,” *

***Accounting      for Cash Consideration Received From a Vendor***

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

***Stock-Based      Compensation***

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation.”*

*“Share-Based      Payment”*

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**Table          of Contents**

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

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**Table          of Contents**

***Insurance      Liabilities***

***Operating      Leases***

*“Accounting      for Leases.”*

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**Table          of Contents**

**RESULTS      OF OPERATIONS**

**Financial      Summary**

|                                                                                                                                                                  |   |                                             |   |                                      |   | **Percentage                Increase** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|-------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                                                                  |   |                                             |   |                                      |   | **(Decrease)**                         |   |
|                                                                                                                                                                  |   | **Percentage                of Net Sales(1)(2)** |   | **From                Prior Year****(2)** |   |
|                                                                                                                                                                  |   | **Fiscal**                                       |   | **Fiscal**                                |   | **Fiscal**                             |   | **Fiscal** |   | **Fiscal** |   |
|                                                                                                                                                                  |   | **2007****(3)**                                  |   | **2006**                                  |   | **2005**                               |   | **2007-2006****(3)** |   | **2006-2005** |   |
|                                                                                                                                                                  |   |                                             |   |                                      |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                                                                                                         |   |                                             | 100.0  | %                                         |   | 100.0                                  | %      |   | 100.0 | % |   | 11.3 | % |   | 18.0 | % |
|                                                                                                                                                                  |   |                                             |   |                                      |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Cost                  of goods sold, buying, catalog, and occupancy                  expenses                                                                         |   |                                             | 69.8   |                                      |   | 69.5                                   |   |   | 70.4 |   |   | 11.9 |   |   | 16.5 |   |
| Selling,                general, and administrative expenses                                                                                                     |   |                                             | 24.6   |                                      |   | 24.6                                   |   |   | 24.7 |   |   | 11.0 |   |   | 17.6 |   |
| Income                from operations                                                                                                                            |   |                                             | 5.6    |                                      |   | 5.9                                    |   |   | 4.9 |   |   | 6.1 |   |   | 42.4 |   |
| Other                income                                                                                                                                      |   |                                             | 0.3    |                                      |   | 0.3                                    |   |   | 0.1 |   |   | 8.6 |   |   | 148.1 |   |
| Interest                expense                                                                                                                                  |   |                                             | 0.5    |                                      |   | 0.6                                    |   |   | 0.7 |   |   | (17.7 | ) |   | 14.7 |   |
| Income                tax provision                                                                                                                              |   |                                             | 1.9    |                                      |   | 1.9                                    |   |   | 1.6 |   |   | 7.9 |   |   | 42.7 |   |
| Net                income                                                                                                                                        |   |                                             | 3.6    |                                      |   | 3.6                                    |   |   | 2.8 |   |   | 9.6 |   |   | 54.0 |   |
| ____________________                                                                                                                                             |   |                                             |   |                                      |   |                                   |   |   |   |   |   |   |   |   |   |   |
| *(1)* *Results                may not add due to rounding.*                                                                                                      |
| *(2)* *Includes                the results of operations of Crosstown Traders, Inc. from the date                of                acquisition on June 2, 2005.* |
| *(3)* *Fiscal                2007 consisted of 53 weeks.*                                                                                                        |

|                                                                                                                                                                  |   | **Year                Ended**              |    | **Year                Ended**       |   | **Year                Ended**       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|-------------------------------------|--------|-------------------------------------|--------|
|                                                                                                                                                                  |   | **February                3, 2007****(1)** |    | **January                28, 2006** |   | **January                29, 2005** |   |
|                                                                                                                                                                  |   | **Fiscal**                                 |    | **Fourth**                          |   | **Fiscal**                          |   | **Fourth** |   | **Fiscal** |   | **Fourth** |   |
| **(In                millions)**                                                                                                                                      |   | **Year**                                   |    | **Quarter**                         |   | **Year**                            |   | **Quarter** |   | **Year** |   | **Quarter** |   |
|                                                                                                                                                                  |   |                                       |    |                                |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FASHION                BUG                                                                                                                                            |   | $                                          | 1,058.3 |                                | $      | 269.1                               |   | $ | 1,049.0 |   | $ | 258.6 |   | $ | 1,043.8 |   | $ | 255.0 |   |
| LANE                BRYANT(2)                                                                                                                                         |   |                                       | 1,202.3 |                                |   | 357.1                               |   |   | 1,057.4 |   |   | 299.8 |   |   | 974.6 |   |   | 260.1 |   |
| CATHERINES                                                                                                                                                            |   |                                       | 367.7   |                                |   | 91.5                                |   |   | 346.2 |   |   | 83.0 |   |   | 312.1 |   |   | 70.4 |   |
| Other                retail stores(3)                                                                                                                                 |   |                                       | 8.1     |                                |   | 6.2                                 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |
| Total                Retail Stores segment sales                                                                                                                      |   |                                       | 2,636.4 |                                |   | 723.9                               |   |   | 2,452.6 |   |   | 641.4 |   |   | 2,330.5 |   |   | 585.5 |   |
| Total                Direct-to-Consumer segment sales(4)                                                                                                              |   |                                       | 427.8   |                                |   | 148.2                               |   |   | 298.9 |   |   | 155.8 |   |   | 0.0 |   |   | 0.0 |   |
| Corporate                and other(5)                                                                                                                                 |   |                                       | 3.3     |                                |   | 1.9                                 |   |   | 4.2 |   |   | 2.4 |   |   | 4.2 |   |   | 2.5 |   |
| Total                net sales                                                                                                                                        |   | $                                          | 3,067.5 |                                | $      | 874.0                               |   | $ | 2,755.7 |   | $ | 799.6 |   | $ | 2,334.7 |   | $ | 588.0 |   |
| ____________________                                                                                                                                             |   |                                       |    |                                |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *(1)* *Fiscal                Year 2007 and Fourth Quarter 2007 consisted of 53 weeks and 14 weeks,                respectively.*                                 |
| *(2)* *Fiscal                2007 includes LANE BRYANT OUTLET stores.*                                                                                           |
| *(3)* *Includes                PETITE SOPHISTICATE OUTLET stores.*                                                                                               |
| *(4)* *Includes                the results of operations of Crosstown Traders, Inc. from the date                of                acquisition on June 2, 2005.* |
| *(5)* *Revenue                related to loyalty card fees.*                                                                                                     |

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**Table          of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **Year                Ended**                | **Year                Ended**       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|-------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **February                  3, 2007****(1)** | **January                28, 2006** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **Fiscal**                                   | **Fourth**                          | **Fiscal** | **Fourth** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **Year**                                     | **Quarter**                         | **Year** | **Quarter** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| **Retail                Stores segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                         |                                |   |   |
| Increase                (decrease) in comparable store sales:(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                         |                                |   |   |
| Consolidated                retail stores                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1%                                           | (1)%                                | 3% | 7% |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (1)                                          | (1)                                 | 0 | 1 |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1                                            | (3)                                 | 4 | 10 |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 4                                            | 2                                   | 10 | 19 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| Sales                from new stores as a percentage of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |                                |   |   |
| consolidated                prior-period net sales:(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                         |                                |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1                                            | 1                                   | 1 | 2 |
| LANE                BRYANT(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 6                                            | 7                                   | 3 | 4 |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1                                            | 0                                   | 1 | 1 |
| Other                retail stores(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 0                                            | 1                                   | -- | -- |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| Prior-period                sales from closed stores as a percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| of                consolidated prior-period net sales:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                         |                                |   |   |
| FASHION                BUG                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (1)                                          | (1)                                 | (1) | (1) |
| LANE                BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (2)                                          | (2)                                 | (1) | (1) |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (0)                                          | (0)                                 | (1) | (1) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| Increase                in Retail Stores segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 7                                            | 13                                  | 5 | 10 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| **Direct-to-Consumer                segment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                         |                                |   |   |
| Increase                (decrease) in Direct-to-Consumer segment sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                  -- (6)                 | (5)                                 | -- | -- |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                         |                                |   |   |
| Increase                in consolidated net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 11%                                          | 9%                                  | 18% | 36% |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |                                |   |   |
| *(1)* *Fiscal                Year 2007 and Fourth Quarter 2007 consisted of 53 weeks and 14 weeks,                respectively. Comparable store sales and changes in sales from new                stores                and closed stores are based on equivalent 52-week and 13-week periods.                The                increase in Retail Stores segment sales, increase (decrease) in                Direct-to-Consumer segment sales, and increase in consolidated net                sales                are based on the 53-week and 14-week periods for Fiscal 2007 and                the                52-week and 13-week periods for Fiscal 2006.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| *(2)* *“Comparable                store sales” is not a measure that has been defined under generally                accepted accounting principles. The method of calculating comparable                store                sales varies across the retail industry and, therefore, our calculation                of                comparable store sales is not necessarily comparable to similarly-titled                measures reported by other companies. We define comparable store                sales as                sales from stores operating in both the current and prior-year periods.                New stores are added to the comparable store sales base 13 months                after                their open date. Sales from stores that are relocated within the                same mall                or strip-center, remodeled, or have a legal square footage change                of less                than 20% are included in the calculation of comparable store sales.                Sales                from stores that are relocated outside the existing mall or strip-center,                or have a legal square footage change of 20% or more, are excluded                from                the calculation of comparable store sales until 13 months after the                relocated store is opened. Stores that are temporarily closed for                a period                of 4 weeks or more are excluded from the calculation of comparable                store                sales for the applicable periods in the year of closure and the subsequent                year. Non-store sales, such as catalog and E-commerce sales, are                excluded                from the calculation of comparable store sales.* |
| *(3)* *Includes                incremental Retail Stores segment E-commerce                sales.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| *(4)* *Includes                LANE BRYANT OUTLET stores.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| *(5)* *Includes                PETITE SOPHISTICATE OUTLET stores.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| *(6)* *Comparison                is not meaningful, as prior-year period includes sales from Crosstown                Traders, Inc. from the date of acquisition on June 2, 2005 (approximately                34 weeks).*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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**Table          of Contents**

|                                                                                                                                                                   |   | **FASHION** |   | **LANE**   |   |           |   |             |   |      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|------------|--------|----------------|--------|------------------|--------|-----------|--------|
|                                                                                                                                                                   |   | **BUG**     |   | **BRYANT** |   | **CATHERINES** |   | **Other****(1)** |   | **Total** |   |
|                                                                                                                                                                   |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| **Fiscal                2007:****(2)**                                                                                                                                 |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| Stores                at January 28, 2006                                                                                                                              |   |        | 1,025  |       |   | 748            |   |             | 463    |      |   | 0 |   |   | 2,236 |   |
|                                                                                                                                                                   |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| Stores                opened                                                                                                                                           |   |        | 10     |       |   | 135            | (3)    |             | 8      |      |   | 45 |   |   | 198 |   |
| Stores                closed                                                                                                                                           |   |        | (26    | )          |   | (24            | )      |             | (6     | )         |   | (0 | ) |   | (56 | ) |
| Net                change in stores                                                                                                                                    |   |        | (16    | )          |   | 111            |   |             | 2      |      |   | 45 |   |   | 142 |   |
|                                                                                                                                                                   |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| Stores                at February 3, 2007                                                                                                                              |   |        | 1,009  |       |   | 859            |   |             | 465    |      |   | 45 |   |   | 2,378 |   |
|                                                                                                                                                                   |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| Stores                relocated during period                                                                                                                          |   |        | 27     |       |   | 24             |   |             | 11     |      |   | 0 |   |   | 62 |   |
|                                                                                                                                                                   |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| **Fiscal                2008**                                                                                                                                         |   |        |   |       |   |           |   |             |   |      |   |   |   |   |   |   |
| Planned                store openings                                                                                                                                  |   |        | 10     |       |   | 65-75          | (4)    |             | 10     |      |   | 10-12 | (5) |   | 95-107 |   |
| Planned                store closings                                                                                                                                  |   |        | 18-22  |       |   | 15-18          | (6)    |             | 7-10   |      |   | 0 |   |   | 40-50 |   |
| Planned                store relocations                                                                                                                               |   |        | 20-25  |       |   | 45-50          | (7)    |             | 10-15  |      |   | 0 |   |   | 75-90 |   |
| *____________________*                                                                                                                                            |
| *(1)* *Includes                PETITE SOPHISTICATE OUTLET stores.*                                                                                                |
| *(2)* *Excludes                2 Crosstown Traders outlet stores.*                                                                                                |
| *(3)* *Includes                82 LANE BRYANT OUTLET stores.*                                                                                                     |
| *(4)* *Includes                approximately 35 LANE BRYANT intimate apparel side-by-side stores                and 15                LANE BRYANT OUTLET stores.* |
| *(5)* *Includes                5 PETITE SOPHISTICATE OUTLET stores and 5-7 full-line PETITE SOPHISTICATE                stores.*                                  |
| *(6)* *Includes                1 LANE BRYANT OUTLET store.*                                                                                                       |
| *(7)* *Includes                approximately 32 conversions to LANE BRYANT intimate apparel side-by-side                stores.*                                  |

**Comparison      of Fiscal 2007 to Fiscal 2006**

***Net      Sales***

----

**Table          of Contents**

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

----

**Table          of Contents**

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

***Interest      Expense***

----

**Table          of Contents**

***Income      Tax Provision***

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES;**
***Income      Taxes***
**”**

**Comparison      of Fiscal 2006 to Fiscal 2005**

***Net      Sales***

----

**Table          of Contents**

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

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

----

**Table          of Contents**

***Other      Income***

***Income      Tax Provision***

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES;**
***Income      Taxes***
**”**

**Comparison      of Fourth Quarter 200**
**7      to Fourth Quarter 2006**

***Net      Sales***

----

**Table          of Contents**

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

----

**Table          of Contents**

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

***Income      Tax Provision***

**FINANCIAL      CONDITION**

**Liquidity      and Capital Resources**

|                                                 |   | **Fiscal** |    | **Fiscal** |   | **Fiscal** |   |
|------------------------------------------------------|--------|------------|---------|------------|--------|------------|--------|
| **(Dollars                in thousands)**            |   | **2007**   |    | **2006**   |   | **2005**   |   |
|                                                 |   |       |    |       |   |       |   |   |   |   |
| Cash                and cash equivalents             |   | $          | 143,838 |       | $      | 130,132    |   | $ | 273,049 |   |
| Available-for-sale                securities         |   |       | 1,997   |       |   | 20,150     |   |   | 0 |   |
| Cash                provided by operating activities |   |       | 186,954 |       |   | 164,812    |   |   | 165,940 |   |
| Working                capital                       |   |       | 443,101 |       |   | 344,229    |   |   | 413,989 |   |
| Current                ratio                         |   |       | 2.1     |       |   | 1.8        |   |   | 2.4 |   |
| Long-term                debt to equity ratio        |   |       | 19.1    | %          |   | 23.6       | %      |   | 30.0 | % |

----

**Table          of Contents**

***Cash      Provided by Operating Activities***

**“CRITICAL      ACCOUNTING POLICIES”**

***Capital      Expenditures***

----

**Table          of Contents**

***Dividends***

----

**Table          of Contents**

***Debt,      Lease, and Purchase Commitments***

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **Payments                Due by Period** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                      |    |   |   | **One                to** |   | **Three** |   | **More** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                      |    | **Less                Than** |   | **Three** |   | **To                Five** |   | **than                Five** |   |
| **(In                millions)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **Total**                                 |    | **One                Year** |   | **Years** |   | **Years** |   | **Years** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                debt, including current portion(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                         | 187.6   |   | $ | 4.7 |   | $ | 9.2 |   | $ | 13.3 |   | $ | 160.4 |   |
| Capital                leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                      | 13.6    |   |   | 8.6 |   |   | 5.0 |   |   | 0.0 |   |   | 0.0 |   |
| Operating                leases(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                      | 904.2   |   |   | 221.2 |   |   | 328.7 |   |   | 191.8 |   |   | 162.5 |   |
| Revolving                credit facility(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                      | 0.0     |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |
| Letters                of credit(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                      | 6.3     |   |   | 6.3 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |
| Stand-by                letters of credit(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                      | 11.9    |   |   | 11.9 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |
| Long-term                deferred compensation(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                      | 3.6     |   |   | 0.5 |   |   | 0.6 |   |   | 0.1 |   |   | 2.4 |   |
| Purchase                commitments(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                      | 634.3   |   |   | 634.3 |   |   | 0.0 |   |   | 0.0 |   |   | 0.0 |   |
| Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                         | 1,761.5 |   | $ | 887.5 |   | $ | 343.5 |   | $ | 205.2 |   | $ | 325.3 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *(1)* *Amounts                represent the expected cash payments (including interest) of our                long-term                debt (including our convertible debt through maturity and excluding                capital leases) and do not include any fair value adjustments, bond                premiums, discounts, or revolving credit facilities.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| *(2)* *Commitments                under operating leases include $14.3 million payable under the LANE                BRYANT                master sublease with Limited Brands, which we have                guaranteed.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *(3)** * *We                currently have a $375 million revolving credit facility that expires                on                July 28, 2010, which provides for cash borrowings and the ability                to issue                up to $300 million of letters of credit. At February 3, 2007, there                were                no borrowings outstanding under this facility.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| *(4)**Long                term compensation consists of our non-qualified deferred compensation                plan                and supplemental retirement plan, which are included in “Deferred taxes                and other non-current liabilities” on our consolidated balance sheets. We                have developed estimates of projected payment obligations for participant                planned in-service distributions of the deferred compensation plan                liability as of February 3, 2007. We have excluded $36.0 million                of                retirement/termination benefit distribution obligations as of February                3,                2007 from the above estimates. This amount has been excluded because                the                value of the obligation and the timing of payments may vary annually                due                to changes in the fair value of the plan assets and/or assumptions                for                participant retirement/termination.* |
| *(5)**Purchase                commitments include agreements to purchase goods or services in the                ordinary course of business.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

**Table          of Contents**

***Off-Balance-Sheet      Arrangements***

| **(Dollars                in millions)**                                                                                                                                                                                                                                                                                                                                                                                                | **Series                1999-2** | **Series                2002-1** | **Series                2004**   | **Series                2004-1** | **2005-RPA**(1)                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |                             |                             |                             |                             |
| Date                of facility                                                                                                                                                                                                                                                                                                                                                                                                         | May                1999          | November                2002     | January                2004      | August                2004       | May                2005          |
| Type                of facility                                                                                                                                                                                                                                                                                                                                                                                                         | Conduit                          | Term                             | Conduit                          | Term                             | Conduit                          |
| Maximum                funding                                                                                                                                                                                                                                                                                                                                                                                                          | $50.0                            | $100.0                           | $50.0                            | $180.0                           | $55.0                            |
| Funding                as of February 3, 2007                                                                                                                                                                                                                                                                                                                                                                                           | $32.0                            | $100.0                           | $0.0                             | $180.0                           | $44.5                            |
| First                scheduled principal payment                                                                                                                                                                                                                                                                                                                                                                                        | Not                applicable    | August                2007       | Not                applicable    | April                2009        | Not                applicable    |
| Expected                final principal payment                                                                                                                                                                                                                                                                                                                                                                                         | Not                applicable(2) | May                2008          | Not                applicable(2) | March                2010        | Not                applicable(2) |
| Renewal                                                                                                                                                                                                                                                                                                                                                                                                                                 | Annual                           | Not                applicable    | Annual                           | Not                applicable    | Annual                           |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                               |                             |                             |                             |                             |                             |
| *(1)* *Receivables                Purchase Agreement (for the Crosstown Traders catalog proprietary                credit                card receivables program).*                                                                                                                                                                                                                                                               |
| *(2)* *Series                1999-2 and Series 2004 have scheduled final payment dates that occur                in                the twelfth month following the month in which the series begins                amortizing. These series and 2005-RPA generally begin amortizing                364 days                after the start of the purchase commitment by the series purchaser                currently in effect.* |

** **

----

**Table          of Contents**

----

**Table          of Contents**

**“CRITICAL      ACCOUNTING POLICIES; **
***Asset      Securitizations***
**”**
* *
**“MARKET      RISK”**
**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      16. ASSET SECURITIZATION**
**”**

**“Liquidity      and Capital Resources”**
**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      17. LEASES**
**”**

***Revolving      Credit Facility***

----

**Table          of Contents**

***Long-term      Debt and Equity Financing***

----

**Table          of Contents**

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT**
**”**

**MARKET      RISK**

***“***
***Off-Balance-Sheet      Financing***
***”***

----

**Table          of Contents**

**IMPACT      OF RECENT ACCOUNTING      PRONOUNCEMENTS**

**“Item      8. Financial Statements and Supplementary Data; Notes to Consolidated Financial      Statements; **
**NOTE      1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
**;      **
***Impact      of Recent Accounting Pronouncements***
**”**

**Item      7A. Quantitative and Qualitative Disclosures About Market      Risk**

**“Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations - **
**MARKET      RISK**
**”**

**Item      8. Financial Statements and Supplementary Data**

**MANAGEMENT’S****REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

*“Internal      Control - Integrated Framework*
*”*

**-**

----

**Table          of Contents**

**REPORT****OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON      INTERNAL**

**CONTROL      OVER FINANCIAL REPORTING**

*“Internal      Control - Integrated Framework,”*

----

**Table          of Contents**

|   | **/S/                ERNST & YOUNG LLP** |
|--------|----------------------------------------------|

----

**Table          of Contents**

**REPORT****OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

*“Internal      Control - Integrated Framework”*

|   | **/S/                ERNST & YOUNG LLP** |
|--------|----------------------------------------------|

----

**Table          of Contents**

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

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                         |   | **February                3,** |      | **January                28,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|--------------------------------|--------|
| **(In                thousands, except share amounts)**                                                                      |   | **2007**                       |      | **2006**                       |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| **ASSETS**                                                                                                                   |   |                           |      |                           |   |   |   |
| **Current                assets**                                                                                            |   |                           |      |                           |   |   |   |
| Cash                and cash equivalents                                                                                |   | $                              | 143,838   |                           | $      | 130,132 |   |
| Available-for-sale                securities                                                                            |   |                           | 1,997     |                           |   | 20,150 |   |
| Accounts                receivable, net of allowances of $5,083 and $6,588                                              |   |                           | 33,366    |                           |   | 38,603 |   |
| Investment                in asset-backed securities                                                                    |   |                           | 60,643    |                           |   | 66,828 |   |
| Merchandise                inventories                                                                                  |   |                           | 429,433   |                           |   | 376,409 |   |
| Deferred                advertising                                                                                     |   |                           | 21,707    |                           |   | 20,591 |   |
| Deferred                taxes                                                                                           |   |                           | 4,469     |                           |   | 19,436 |   |
| Prepayments                and other                                                                                    |   |                           | 145,385   |                           |   | 89,245 |   |
| **Total                current assets**                                                                                      |   |                           | 840,838   |                           |   | 761,394 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| Property,                equipment, and leasehold improvements - at cost                                                |   |                           | 996,430   |                           |   | 896,835 |   |
| Less                accumulated depreciation and amortization                                                           |   |                           | 573,984   |                           |   | 525,882 |   |
| **Net                property, equipment, and leasehold improvements**                                                       |   |                           | 422,446   |                           |   | 370,953 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| Trademarks                and other intangible assets                                                                   |   |                           | 249,490   |                           |   | 250,074 |   |
| Goodwill                                                                                                                |   |                           | 153,370   |                           |   | 154,553 |   |
| Other                assets                                                                                             |   |                           | 44,798    |                           |   | 35,609 |   |
| **Total                assets**                                                                                         |   | $                              | 1,710,942 |                           | $      | 1,572,583 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                |   |                           |      |                           |   |   |   |
| **Current                liabilities**                                                                                       |   |                           |      |                           |   |   |   |
| Short-term                borrowings                                                                                    |   | $                              | 0         |                           | $      | 50,000 |   |
| Accounts                payable                                                                                         |   |                           | 178,629   |                           |   | 133,236 |   |
| Accrued                expenses                                                                                         |   |                           | 208,221   |                           |   | 217,421 |   |
| Income                taxes payable                                                                                     |   |                           | 0         |                           |   | 1,743 |   |
| Current                portion - long-term debt                                                                         |   |                           | 10,887    |                           |   | 14,765 |   |
| **Total                current liabilities**                                                                                 |   |                           | 397,737   |                           |   | 417,165 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| Deferred                taxes                                                                                           |   |                           | 57,340    |                           |   | 50,634 |   |
| Other                non-current liabilities                                                                            |   |                           | 127,203   |                           |   | 98,457 |   |
| Long-term                debt                                                                                           |   |                           | 181,124   |                           |   | 191,979 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| **Stockholders’                equity**                                                                                |   |                           |      |                           |   |   |   |
| Common                stock $.10 par value                                                                                   |   |                           |      |                           |   |   |   |
| Authorized                - 300,000,000 shares                                                                               |   |                           |      |                           |   |   |   |
| Issued                - 135,762,531 shares and 133,954,852 shares                                                            |   |                           | 13,576    |                           |   | 13,395 |   |
| Additional                paid-in capital                                                                               |   |                           | 285,159   |                           |   | 261,077 |   |
| Treasury                stock at cost - 12,265,993 shares                                                               |   |                           | (84,136   | )                              |   | (84,136 | ) |
| Accumulated                other comprehensive income (loss)                                                            |   |                           | 1         |                           |   | (3 | ) |
| Retained                earnings                                                                                        |   |                           | 732,938   |                           |   | 624,015 |   |
| **Total                stockholders’ equity**                                                                          |   |                           | 947,538   |                           |   | 814,348 |   |
| **Total                liabilities and stockholders’ equity**                                                     |   | $                              | 1,710,942 |                           | $      | 1,572,583 |   |
|                                                                                                                         |   |                           |      |                           |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
|                                                                                                                         |
| ***See                Notes to Consolidated Financial                Statements.***                                          |

----

**Table          of Contents**

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

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**AND      COMPREHENSIVE INCOME**

|                                                                                                                         |   | **Year                Ended**  |      |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                                                         |   | **February                3,** |      | **January                28,** |   | **January                29,** |   |
| **(In                thousands, except per share amounts)**                                                                  |   | **2007**                       |      | **2006** |   | **2005** |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Net                sales**                                                                                            |   | $                              | 3,067,517 |   | $ | 2,755,725 |   | $ | 2,334,736 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| Cost                of goods sold, buying, catalog, and occupancy expenses                                              |   |                           | 2,141,884 |   |   | 1,914,347 |   |   | 1,642,650 |   |
| Selling,                general, and administrative expenses                                                            |   |                           | 753,109   |   |   | 678,753 |   |   | 577,301 |   |
| Expenses                related to cost reduction plan                                                                  |   |                           | 0         |   |   | 0 |   |   | 605 |   |
| **Total                operating expenses**                                                                             |   |                           | 2,894,993 |   |   | 2,593,100 |   |   | 2,220,556 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Income                from operations**                                                                               |   |                           | 172,524   |   |   | 162,625 |   |   | 114,180 |   |
| Other                income                                                                                             |   |                           | 8,345     |   |   | 7,687 |   |   | 3,098 |   |
| Interest                expense                                                                                         |   |                           | (14,746   | ) |   | (17,911 | ) |   | (15,610 | ) |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| Income                before income taxes                                                                               |   |                           | 166,123   |   |   | 152,401 |   |   | 101,668 |   |
| Income                tax provision                                                                                     |   |                           | 57,200    |   |   | 53,010 |   |   | 37,142 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Net                income**                                                                                           |   |                           | 108,923   |   |   | 99,391 |   |   | 64,526 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Other                comprehensive income/(loss), net of tax:**                                                            |   |                           |      |   |   |   |   |   |   |   |
| Unrealized                gains/(losses) on available-for-sale securities, net of income                tax                  |   |                           |      |   |   |   |   |   |   |   |
| (provision)/benefit                of $(3) in 2007, $3 in 2006, and $(92) in 2005                                            |   |                           | 4         |   |   | (3 | ) |   | 113 |   |
| Reclassification                of realized losses on available-for-sale securities                                          |   |                           |      |   |   |   |   |   |   |   |
| included                in net income, net of income tax benefit of $61 in 2005                                              |   |                           | 0         |   |   | 0 |   |   | 124 |   |
| Reclassification                of amortization of deferred loss on termination of                derivative,                |   |                           |      |   |   |   |   |   |   |   |
| net                of income tax benefit of $68 in 2005                                                                      |   |                           | 0         |   |   | 0 |   |   | 128 |   |
| Total                other comprehensive income/(loss)                                                                  |   |                           | 4         |   |   | (3 | ) |   | 365 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Comprehensive                income**                                                                                 |   | $                              | 108,927   |   | $ | 99,388 |   | $ | 64,891 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Basic                net income per share**                                                                           |   | $                              | .89       |   | $ | .83 |   | $ | .56 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| **Diluted                net income per share**                                                                         |   | $                              | .81       |   | $ | .76 |   | $ | .52 |   |
|                                                                                                                         |   |                           |      |   |   |   |   |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
|                                                                                                                         |
| ***See                Notes to Consolidated Financial                Statements.***                                          |

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**Table          of Contents**

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

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY**

|                                                                                                                         |   |                            |        |        |   |              |   | **Accumulated**                  |    |         |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|-------------|--------|-------------------|--------|----------------------------------|---------|--------------|--------|
|                                                                                                                         |   |                            |        |        |   | **Additional**    |   | **Other**                        |    |         |   |
|                                                                                                                         |   | **Common                Stock** |        | **Paid-in** |   | **Comprehensive** |   | **Retained**                     |    |
| **(Dollars                in thousands)**                                                                                    |   | **Shares**                      |        | **Amount**  |   | **Capital**       |   | **Income                (Loss)** |    | **Earnings** |   |
|                                                                                                                         |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| **Balance,                January 31, 2004**                                                                            |   |                            | 125,526,573 |        | $      | 12,553            |   | $                                | 199,259 |         | $      | (365 | ) | $ | 460,098 |   |
| Issued                to employees, net                                                                                 |   |                            | 411,411     |        |   | 41                |   |                             | 382     |         |   |   |   |   |   |   |
| Exercise                of stock options                                                                                |   |                            | 6,249,634   |        |   | 625               |   |                             | 33,062  |         |   |   |   |   |   |   |
| Shares                withheld for payment of employee                                                                       |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| payroll                taxes due on shares issued                                                                            |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| under                employee stock plans                                                                                    |   |                            | (15,082     | )           |   | (2                | )      |                             | (92     | )            |   |   |   |   |   |   |
| Shares                received in payment of stock                                                                           |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| option                exercises                                                                                              |   |                            | (109,246    | )           |   | (11               | )      |                             | (847    | )            |   |   |   |   |   |   |
| Deferred                compensation related to stock plans                                                             |   |                            |        |        |   |              |   |                             | 2,537   |         |   |   |   |   |   |   |
| Tax                benefit - employee stock programs                                                                    |   |                            |        |        |   |              |   |                             | 6,469   |         |   |  |   |   |  |   |
| Unrealized                gains, net of income taxes of $(221)                                                          |   |                            |        |        |   |              |   |                             |    |         |   | 365 |   |   |   |   |
| Net                income                                                                                               |   |                            |             |        |   |                   |   |                             |         |         |   |  |   |   | 64,526 |   |
| **Balance,                January 29, 2005**                                                                            |   |                            | 132,063,290 |        |   | 13,206            |   |                             | 240,770 |         |   | 0 |   |   | 524,624 |   |
| Issued                to employees, net                                                                                 |   |                            | 51,909      |        |   | 5                 |   |                             | 708     |         |   |   |   |   |   |   |
| Exercise                of stock options                                                                                |   |                            | 1,865,554   |        |   | 187               |   |                             | 9,384   |         |   |   |   |   |   |   |
| Shares                withheld for payment of employee                                                                       |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| payroll                taxes due on shares issued                                                                            |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| under                employee stock plans                                                                                    |   |                            | (25,901     | )           |   | (3                | )      |                             | (216    | )            |   |   |   |   |   |   |
| Deferred                compensation related to stock plans                                                             |   |                            |        |        |   |              |   |                             | 6,814   |         |   |   |   |   |   |   |
| Tax                benefit - employee stock programs                                                                    |   |                            |        |        |   |              |   |                             | 3,617   |         |   |   |   |   |   |   |
| Unrealized                losses, net of income taxes of $3                                                             |   |                            |        |        |   |              |   |                             |    |         |   | (3 | ) |   |   |   |
| Net                income                                                                                               |   |                            |             |        |   |                   |   |                             |         |         |   |  |   |   | 99,391 |   |
| **Balance,                January 28, 2006**                                                                            |   |                            | 133,954,852 |        |   | 13,395            |   |                             | 261,077 |         |   | (3 | ) |   | 624,015 |   |
| Issued                to employees, net                                                                                 |   |                            | 361,477     |        |   | 36                |   |                             | 783     |         |   |   |   |   |   |   |
| Exercise                of stock options                                                                                |   |                            | 1,536,580   |        |   | 154               |   |                             | 9,011   |         |   |   |   |   |   |   |
| Shares                withheld for payment of employee                                                                       |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| payroll                taxes due on shares issued                                                                            |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| under                employee stock plans                                                                                    |   |                            | (90,378     | )           |   | (9                | )      |                             | (1,217  | )            |   |   |   |   |   |   |
| Deferred                compensation related to stock plans                                                             |   |                            |        |        |   |              |   |                             | 10,386  |         |   |   |   |   |   |   |
| Tax                benefit - employee stock programs                                                                    |   |                            |        |        |   |              |   |                             | 5,119   |         |   |   |   |   |   |   |
| Unrealized                gains, net of income taxes of $(3)                                                            |   |                            |        |        |   |              |   |                             |    |         |   | 4 |   |   |   |   |
| Net                income                                                                                               |   |                            |             |        |   |                   |   |                             |         |         |   |  |   |   | 108,923 |   |
| **Balance,                February 3, 2007**                                                                            |   |                            | 135,762,531 |        | $      | 13,576            |   | $                                | 285,159 |         | $      | 1 |   | $ | 732,938 |   |
|                                                                                                                         |   |                            |        |        |   |              |   |                             |    |         |   |   |   |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation. |
|                                                                                                                         |
| ***See                Notes to Consolidated Financial                Statements.***                                          |

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**Table          of Contents**

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

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

|                                                                                                                               |   | **Year                Ended**  |     |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------|
|                                                                                                                               |   | **February                3,** |     | **January                28,** |   | **January                29,** |   |
| **(In                thousands)**                                                                                                  |   | **2007**                       |     | **2006** |   | **2005** |   |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| **Operating                activities**                                                                                            |   |                           |     |   |   |   |   |   |   |   |
| Net                income                                                                                                     |   | $                              | 108,923  |   | $ | 99,391 |   | $ | 64,526 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:                    |   |                           |     |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                                  |   |                           | 91,244   |   |   | 84,297 |   |   | 77,069 |   |
| Deferred                income taxes                                                                                          |   |                           | 20,719   |   |   | (10,139 | ) |   | 11,521 |   |
| Stock-based                compensation                                                                                       |   |                           | 10,386   |   |   | 6,814 |   |   | 2,537 |   |
| Excess                tax benefits related to stock-based compensation                                                        |   |                           | (5,119   | ) |   | 3,617 |   |   | 6,469 |   |
| Net                (gain)/loss from disposition of capital assets                                                             |   |                           | 1,618    |   |   | (725 | ) |   | 736 |   |
| Net                gain from securitization activities                                                                        |   |                           | (818     | ) |   | (3,105 | ) |   | (1,182 | ) |
| Other,                net                                                                                                     |   |                           | 0        |   |   | 0 |   |   | 185 |   |
| Changes                in operating assets and liabilities:                                                                        |   |                           |     |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                 |   |                           | 5,237    |   |   | (31,315 | ) |   | 0 |   |
| Merchandise                inventories                                                                                             |   |                           | (53,024  | ) |   | (20,051 | ) |   | 24,875 |   |
| Accounts                payable                                                                                                    |   |                           | 45,393   |   |   | (6,952 | ) |   | (7,958 | ) |
| Deferred                advertising                                                                                                |   |                           | (1,116   | ) |   | (7,797 | ) |   | 0 |   |
| Prepayments                and other                                                                                               |   |                           | (54,390  | ) |   | 5,636 |   |   | (28,888 | ) |
| Income                taxes payable                                                                                                |   |                           | 3,376    |   |   | 1,743 |   |   | (1,128 | ) |
| Accrued                expenses and other                                                                                          |   |                           | 14,525   |   |   | 43,398 |   |   | 17,178 |   |
| **Net                cash provided by operating activities**                                                                  |   |                           | 186,954  |   |   | 164,812 |   |   | 165,940 |   |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| **Investing                activities**                                                                                            |   |                           |     |   |   |   |   |   |   |   |
| Investment                in capital assets                                                                                   |   |                           | (133,156 | ) |   | (103,835 | ) |   | (60,565 | ) |
| Proceeds                from sales of capital assets                                                                          |   |                           | 0        |   |   | 3,432 |   |   | 0 |   |
| Gross                purchases of securities                                                                                  |   |                           | (37,022  | ) |   | (50,630 | ) |   | (29,705 | ) |
| Proceeds                from sales of securities                                                                              |   |                           | 62,185   |   |   | 18,849 |   |   | 48,206 |   |
| Acquisition                of Crosstown Traders, Inc., net of cash acquired                                                   |   |                           | 0        |   |   | (256,717 | ) |   | 0 |   |
| Purchase                of Catherines receivables portfolio                                                                   |   |                           | 0        |   |   | (56,582 | ) |   | 0 |   |
| Securitization                of Catherines receivables portfolio                                                             |   |                           | 0        |   |   | 56,582 |   |   | 0 |   |
| Securitization                of Crosstown Traders, Inc. apparel-related receivables                                          |   |                           | 0        |   |   | 50,000 |   |   | 0 |   |
| Increase                in other assets                                                                                       |   |                           | (14,399  | ) |   | (5,264 | ) |   | (6,984 | ) |
| **Net                cash used by investing activities**                                                                      |   |                           | (122,392 | ) |   | (344,165 | ) |   | (49,048 | ) |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| **Financing                activities**                                                                                            |   |                           |     |   |   |   |   |   |   |   |
| Proceeds                from short-term borrowings                                                                            |   |                           | 149,377  |   |   | 382,573 |   |   | 186,173 |   |
| Repayments                of short-term borrowings                                                                            |   |                           | (199,377 | ) |   | (332,573 | ) |   | (186,173 | ) |
| Proceeds                from long-term borrowings                                                                             |   |                           | 0        |   |   | 0 |   |   | 18,098 |   |
| Repayments                of long-term borrowings                                                                             |   |                           | (14,733  | ) |   | (22,212 | ) |   | (18,530 | ) |
| Payments                of deferred financing costs                                                                           |   |                           | 0        |   |   | (1,417 | ) |   | (350 | ) |
| Excess                tax benefits related to stock-based compensation                                                        |   |                           | 5,119    |   |   | 0 |   |   | 0 |   |
| Proceeds                from issuance of common stock                                                                         |   |                           | 8,758    |   |   | 10,065 |   |   | 33,158 |   |
| **Net                cash provided/(used) by financing activities**                                                           |   |                           | (50,856  | ) |   | 36,436 |   |   | 32,376 |   |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| **Increase/(decrease)                in cash and cash equivalents**                                                           |   |                           | 13,706   |   |   | (142,917 | ) |   | 149,268 |   |
| **Cash                and cash equivalents, beginning of year**                                                               |   |                           | 130,132  |   |   | 273,049 |   |   | 123,781 |   |
| **Cash                and cash equivalents, end of year**                                                                     |   | $                              | 143,838  |   | $ | 130,132 |   | $ | 273,049 |   |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| **Non-cash                financing and investing activities**                                                                     |   |                           |     |   |   |   |   |   |   |   |
| Equipment                acquired through capital leases                                                                      |   | $                              | 0        |   | $ | 3,892 |   | $ | 5,399 |   |
|                                                                                                                               |   |                           |     |   |   |   |   |   |   |   |
| Certain                prior-year amounts have been reclassified to conform to the current-year                presentation.  |
| ***See                Notes to Consolidated Financial                Statements.***                                                |

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**Table          of Contents**

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

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**NOTE      1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Business***

**“NOTE      2. ACQUISITION OF **
**CROSSTOWN      TRADERS**
**,      INC.”**

***Principles      of Consolidation***

**-      **

***Business      Segments and Related Disclosures***

**“NOTE      2. ACQUISITION OF**
**      CROSSTOWN TRADERS, **
**INC.”**
**,      **
**“**
**NOTE      18. SEGMENT REPORTING**
**”**

***Foreign      Operations***

***Use      of Estimates***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Reclassifications***

***Cash      Equivalents***

***Available-for-Sale      Securities***

***Accounts      Receivable***

***Inventories***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Deferred      and Non-Deferred Advertising Costs***

*“Reporting      on Advertising Costs,” *

***Property      and Depreciation***

**“**
***Operating      Leases”***

*Accounting      for the Impairment or Disposal of Long-Lived Assets.*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Lease      Accounting***

*Accounting      for Leases*

***Goodwill      and Other Intangible Assets***

*“Goodwill      and Other Intangible Assets.”*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**“**
**NOTE      18. SEGMENT REPORTING”**

***Asset      Securitization***

*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities.”*

***Insurance      Liabilities***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Stock-based      Compensation***

*“Accounting      for Stock Issued to Employees,”*
*“Accounting      for Stock-Based Compensation.”*

*“Share-Based      Payment”*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

| **(In                thousands, except per share amounts)**                                      |   | **2006** |   | **2005** |   |
|--------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                                                             |   |     |   |     |   |   |   |
| Net                income as reported                                                       |   | $        | 99,391 |     | $      | 64,526 |   |
| Add                stock-based employee compensation as reported, using                intrinsic |   |     |   |     |   |   |   |
| value                method, net of income taxes                                                 |   |     | 4,429  |     |   | 1,649 |   |
| Less                stock-based employee compensation, using fair-value                method,   |   |     |   |     |   |   |   |
| net                of income taxes                                                               |   |     | (5,307 | )        |   | (3,862 | ) |
| Pro                forma net income                                                         |   | $        | 98,513 |     | $      | 62,313 |   |
|                                                                                             |   |     |   |     |   |   |   |
| Basic                net income per share:                                                       |   |     |   |     |   |   |   |
| As                reported                                                                       |   | $        | .83    |     | $      | .56 |   |
| Pro                forma                                                                         |   |     | .82    |     |   | .54 |   |
| Diluted                net income per share:                                                     |   |     |   |     |   |   |   |
| As                reported                                                                       |   |     | .76    |     |   | .52 |   |
| Pro                forma                                                                         |   |     | .75    |     |   | .50 |   |

***Revenue      Recognition***

**“**
**NOTE      12. CUSTOMER LOYALTY CARD PROGRAMS**
**”**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

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

**“**
***Revenue      Recognition”***
* *
***Deferred      Catalog Advertising Costs”***

***Costs      Associated With Exit or Disposal Activities***

*“Accounting      for Costs Associated with Exit or Disposal Activities.”*

***Income      Taxes***

*Accounting      for Income Taxes*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Net      Income (Loss) Per Share***

***Comprehensive      Income***

***Deferred      Debt Acquisition Costs***

***Costs      of Computer Software Developed or Obtained for Internal      Use***

***Cash      Consideration Received from Vendors***

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

***Impact      of Recent Accounting Pronouncements***

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

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

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

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

*“Accounting      and Servicing of Financial Assets - an amendment of FASB Statement No.      140.”*
*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,”*

| ·   | Amortization                method - Amortize the servicing assets or liabilities in proportion                to,                and over the period of, estimated net servicing income or loss and                assess                the assets or liabilities for impairment or increased obligation                based on                fair value at each reporting date. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fair                value measurement method - Measure the servicing assets or liabilities                at                fair value at each reporting date and report changes in fair value                in                earnings in the period in which the changes                occur. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

*“How      Taxes Collected from Customers and Remitted to Governmental Authorities Should      Be Presented in the Income Statement (That Is, Gross versus Net      Presentation).”*

*“Accounting      for Uncertainty in Income Taxes—an interpretation of FASB Statement No.      109.”*

*“Accounting      for Income Taxes.”*

*“Accounting      for Deferred Compensation and Postretirement Benefit Aspects of Endorsement      Split-Dollar Life Insurance Agreements.”*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

*“Accounting      for Purchases of Life Insurance - Determining the Amount That Could be Realized      in Accordance with FASB Technical Bulletin 85-4.”*

*“Financial      Statements - Considering the Effects of Prior Year Misstatements when      Quantifying Misstatements in Current Year Financial      Statements.”*
*“Financial      Statements - Materiality”*

*“Fair      Value Measurements.”*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      2. ACQUISITION OF CROSSTOWN TRADERS, INC.**

**Note      8. Short-term Borrowings and Long-term Debt**

*“Business      Combinations,”*

*Goodwill      and Other Intangible Assets,*

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                                                           |   | **Purchase**   |    |
|------------------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                           |   | **Price**      |    |
| **(In                thousands)**                                                              |   | **Allocation** |    |
|                                                                                           |   |           |    |   |
| Fair                value of assets acquired:                                                  |   |           |    |   |
| Cash                and cash equivalents                                                  |   | $              | 5,815   |   |
| Accounts                receivable                                                        |   |           | 60,092  |   |
| Merchandise                inventories                                                    |   |           | 71,238  |   |
| Deferred                advertising                                                       |   |           | 12,794  |   |
| Property,                equipment, and leasehold improvements                            |   |           | 19,321  |   |
| Prepayments                and other                                                      |   |           | 8,319   |   |
| Fair                value of liabilities assumed                                          |   |           | (59,785 | ) |
| Intangible                assets subject to amortization                                  |   |           | 13,100  |   |
| Intangible                assets not subject to amortization (trademarks and tradenames)  |   |           | 70,000  |   |
| Deferred                tax effect of acquisition                                         |   |           | (26,816 | ) |
| Goodwill                                                                                  |   |           | 86,704  |   |
| Total                purchase price                                                       |   | $              | 260,782 |   |

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

|                                                     |   | **Balance                at**  |   | **Fiscal                2007** |   | **Balance                at** |   |
|----------------------------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
|                                                     |   | **January                28,** |   |                           |   | **Payments/**                 |   | **February                3,** |   |
| **(In                thousands)**                        |   | **2006**                       |   | **Adjustments**                |   | **Settlements**               |   | **2007** |   |
|                                                     |   |                           |   |                           |   |                          |   |   |   |   |   |   |   |
| Severance                and related costs          |   | $                              | 4,380  |                           | $      | (728                          | )      | $ | (3,652 | ) | $ | 0 |   |
| Lease                termination and related costs  |   |                           | 2,180  |                           |   | 564                           |   |   | (924 | ) |   | 1,820 |   |
| Unfavorable                contract costs           |   |                           | 900    |                           |   | (900                          | )      |   |   |   |   | 0 |   |
| Other                costs                          |   |                           | 1,154  |                           |   | (62                           | )      |   | (853 | ) |   | 239 |   |
| Total                                               |   | $                              | 8,614  |                           | $      | (1,126                        | )      | $ | (5,429 | ) | $ | 2,059 |   |

----

**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                        |   | **Year                Ended**  |      |
|-------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                        |   | **January                28,** |      | **January                29,** |   |
| **(In                thousands, except per share amounts)** |   | **2006**                       |      | **2005** |   |
|                                                        |   |                           |      |   |   |   |   |
| Net                sales                               |   | $                              | 2,897,904 |   | $ | 2,793,663 |   |
| Net                income                              |   |                           | 98,317    |   |   | 75,197 |   |
|                                                        |   |                           |      |   |   |   |   |
| Net                income per share:                        |   |                           |      |   |   |   |   |
| Basic                                                       |   | $                              | .82       |   | $ | .65 |   |
| Diluted                                                     |   |                           | .75       |   |   | .60 |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      3. AVAILABLE-FOR-SALE SECURITIES**

|                                     |   |     |   | **Estimated**                 |   |
|------------------------------------------|--------|----------|--------|-------------------------------|--------|
| **(In                thousands)**        |   | **Cost** |   | **Fair                Value** |   |
|                                     |   |     |   |                          |   |   |   |
| **February                3, 2007**      |   |     |   |                          |   |   |   |
| U.S.                Treasury Bills  |   | $        | 1,497  |                          | $      | 1,497 |   |
| Other                               |   |     | 500    |                          |   | 500 |   |
|                                     |   | $        | 1,997  |                          | $      | 1,997 |   |
| **January                28, 2006**      |   |     |   |                          |   |   |   |
| U.S.                Treasury Bills  |   | $        | 19,781 |                          | $      | 19,781 |   |
| Other                               |   |     | 369    |                          |   | 369 |   |
|                                     |   | $        | 20,150 |                          | $      | 20,150 |   |

**NOTE      4. ACCOUNTS RECEIVABLE**

| **(In                thousands)**                    |   | **2007** |   | **2006** |   |
|------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                 |   |     |   |     |   |   |   |
| Due                from customers               |   | $        | 38,449 |     | $      | 45,191 |   |
| Allowance                for doubtful accounts  |   |     | (5,083 | )        |   | (6,588 | ) |
| Net                accounts receivable          |   | $        | 33,366 |     | $      | 38,603 |   |

|                                                                          |   | **Year                Ended**  |   |
|-------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                          |   | **February                3,** |   | **January                28,** |   |
|                                                                          |   | **2007**                       |   | **2006** |   |
|                                                                          |   |                           |   |   |   |   |   |
| Beginning                balance                                         |   | $                              | (6,588 | ) | $ | 0 | (1) |
| Provision                for doubtful accounts                           |   |                           | (4,924 | ) |   | (5,661 | ) |
| Collections                of accounts previously written off            |   |                           | (1,274 | ) |   | (1,030 | ) |
| Accounts                written off                                      |   |                           | 7,703  |   |   | 103 |   |
| Ending                balance                                            |   | $                              | (5,083 | ) | $ | (6,588 | ) |
| ____________________                                                     |   |                           |   |   |   |   |   |
| *(1)* *Balance                as of June 5, 2005 (date of acquisition).* |   |                           |   |   |   |   |   |

----

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      5. PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS**

|                                                                      |   | **Lives**   |                    |     |   |     |   |
|---------------------------------------------------------------------------|--------|-------------|-------------------------|----------|--------|----------|--------|
| **(Dollars                in thousands)**                                 |   | **(Years)** |                    | **2007** |   | **2006** |   |
|                                                                      |   |        |                    |     |   |     |   |   |   |   |
| Land                                                                 |   |        |                    |     | $      | 5,829    |   | $ | 5,829 |   |
| Buildings                and improvements                            |   |        | 10                to 40 |     |   | 74,125   |   |   | 74,573 |   |
| Store                fixtures                                        |   |        | 5                to 10  |     |   | 162,879  |   |   | 145,586 |   |
| Equipment                                                            |   |        | 3                to 10  |     |   | 232,095  |   |   | 208,266 |   |
| Equipment                acquired under capital leases               |   |        | 7                       |     |   | 71,909   |   |   | 71,908 |   |
| Leasehold                improvements                                |   |        | 10(1)                   |     |   | 433,439  |   |   | 382,319 |   |
| Construction                in progress                              |   |        | -                       |     |   | 16,154   |   |   | 8,354 |   |
| Total                at cost                                         |   |        |                    |     |   | 996,430  |   |   | 896,835 |   |
| Less: Accumulated                depreciation and amortization  |   |        |                    |     |   | 528,912  |   |   | 491,154 |   |
| Accumulated                amortization of capital lease assets           |   |        |                    |     |   | 45,072   |   |   | 34,728 |   |
| Total                accumulated depreciation and amortization       |   |        |                    |     |   | 573,984  |   |   | 525,882 |   |
| Net                property, equipment, and leasehold improvements   |   |        |                    |     | $      | 422,446  |   | $ | 370,953 |   |
| ____________________                                                 |   |        |                    |     |   |     |   |   |   |   |
| *(1)* *Or                the life of the lease, if shorter.*         |   |        |                    |     |   |     |   |   |   |   |

**NOTE      6. TRADEMARKS AND OTHER INTANGIBLE ASSETS**

|                                                                   |   | **Life**    |                  |     |   |     |   |
|------------------------------------------------------------------------|--------|-------------|-----------------------|----------|--------|----------|--------|
| **(Dollars                in thousands)**                              |   | **(Years)** |                  | **2007** |   | **2006** |   |
|                                                                   |   |        |                  |     |   |     |   |   |   |   |
| Trademarks,                tradenames, and Internet domain names  |   |        |                  |     | $      | 241,850  |   | $ | 238,800 |   |
| Customer                lists, customer relationships,                 |   |        |                  |     |   |     |   |   |   |   |
| and                covenant not to compete                        |   |        | 4                to 5 |     |   | 16,400   |   |   | 16,400 |   |
| Total                at cost                                      |   |        |                  |     |   | 258,250  |   |   | 255,200 |   |
| Less: accumulated                amortization of customer lists,  |   |        |                  |     |   |     |   |   |   |   |
| customer                relationships, and covenant not to compete     |   |        |                  |     |   | 8,760    |   |   | 5,126 |   |
| Net                trademarks and other intangible assets         |   |        |                  |     | $      | 249,490  |   | $ | 250,074 |   |

**-      **
**-      **

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      7. INCOME TAXES**

| **(In                thousands)** |   | **2007** |    | **2006** |   | **2005** |   |
|-----------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                              |   |     |    |     |   |     |   |   |   |   |
| Domestic                          |   | $        | 154,025 |     | $      | 144,753  |   | $ | 98,144 |   |
| Foreign                           |   |     | 12,098  |     |   | 7,648    |   |   | 3,524 |   |
|                              |   | $        | 166,123 |     | $      | 152,401  |   | $ | 101,668 |   |

| **(In                thousands)** |   | **2007** |   | **2006** |   | **2005** |   |
|-----------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                              |   |     |   |     |   |     |   |   |   |   |
| **Current:**                      |   |     |   |     |   |     |   |   |   |   |
| Federal                           |   | $        | 38,066 |     | $      | 50,097   |   | $ | 20,857 |   |
| State                             |   |     | 5,007  |     |   | 4,255    |   |   | 6,275 |   |
| Foreign                           |   |     | 1,649  |     |   | 892      |   |   | 668 |   |
|                              |   |     | 44,722 |     |   | 55,244   |   |   | 27,800 |   |
| **Deferred**:                     |   |     |   |     |   |     |   |   |   |   |
| Federal                           |   |     | 12,815 |     |   | (547     | )      |   | 8,885 |   |
| State                             |   |     | (337   | )        |   | (1,687   | )      |   | 457 |   |
|                              |   |     | 12,478 |     |   | (2,234   | )      |   | 9,342 |   |
|                              |   | $        | 57,200 |     | $      | 53,010   |   | $ | 37,142 |   |

|                                                       |   | **2007** |   | **2006** |   | **2005** |   |
|------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                       |   |     |   |     |   |     |   |   |   |   |
| Statutory                Federal income tax rate           |   |     | 35.0   | %        |   | 35.0     | %      |   | 35.0 | % |
| State                income tax, net of Federal income tax |   |     | 0.8    |     |   | 0.4      |   |   | 2.2 |   |
| Foreign                income                              |   |     | (1.5   | )        |   | (1.2     | )      |   | (0.6 | ) |
| Employee                benefits                           |   |     | (0.3   | )        |   | (0.6     | )      |   | (1.0 | ) |
| Other,                net                                  |   |     | 0.4    |     |   | 1.2      |   |   | 0.9 |   |
| Effective                tax rate                          |   |     | 34.4   | %        |   | 34.8     | %      |   | 36.5 | % |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                           |   | **Net                Current** |   | **Net                Long-Term** |   |
|----------------------------------------------------------------|--------|--------------------------------|--------|----------------------------------|--------|
|                                                           |   | **Assets**                     |   | **Assets**                       |   |
| **(In                thousands)**                              |   | **(Liabilities)**              |   | **(Liabilities)**                |   |
|                                                           |   |                           |   |                             |   |   |   |
| **February                3, 2007**                            |   |                           |   |                             |   |   |   |
| Property,                equipment, and leasehold improvements |   |                           |   |                             | $      | (11,064 | ) |
| Accounts                receivable                             |   | $                              | (4,409 | )                                |   |   |   |
| Tax                credit and loss carryforwards               |   |                           | 9,303  |                             |   |   |   |
| Prepaid                and accrued expenses                    |   |                           | (6,367 | )                                |   |   |   |
| Inventory                                                      |   |                           | 2,983  |                             |   |   |   |
| Deferred                compensation                           |   |                           |   |                             |   | 17,548 |   |
| Goodwill                and intangible assets                  |   |                           |   |                             |   | (60,187 | ) |
| Investments                                                    |   |                           |   |                             |   | (556 | ) |
| Deferred                rent                                   |   |                           |   |                             |   | 12,611 |   |
| Credit                card late fees                           |   |                           |   |                             |   | (15,428 | ) |
| Other                                                          |   |                           | 2,959  |                             |   | (264 | ) |
|                                                           |   | $                              | 4,469  |                             | $      | (57,340 | ) |
|                                                           |   |                           |   |                             |   |   |   |
| **January                28, 2006**                            |   |                           |   |                             |   |   |   |
| Property,                equipment, and leasehold improvements |   |                           |   |                             | $      | (15,669 | ) |
| Accounts                receivable                             |   | $                              | (900   | )                                |   |   |   |
| Tax                credit and loss carryforwards               |   |                           | 2,406  |                             |   |   |   |
| Prepaid                and accrued expenses                    |   |                           | 7,614  |                             |   |   |   |
| Inventory                                                      |   |                           | 3,716  |                             |   |   |   |
| Deferred                compensation                           |   |                           | 4,355  |                             |   | 14,641 |   |
| Goodwill                and intangible assets                  |   |                           |   |                             |   | (57,163 | ) |
| Investments                                                    |   |                           |   |                             |   | (924 | ) |
| Deferred                rent                                   |   |                           |   |                             |   | 14,036 |   |
| Credit                card late fees                           |   |                           |   |                             |   | (5,588 | ) |
| Other                                                          |   |                           | 2,245  |                             |   | 33 |   |
|                                                           |   | $                              | 19,436 |                             | $      | (50,634 | ) |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT**

| **(In                thousands)**                           |   | **2007** |    | **2006** |   |
|-------------------------------------------------------------|--------|----------|---------|----------|--------|
|                                                        |   |     |    |     |   |   |   |
| **Short-term                borrowings**                    |   |     |    |     |   |   |   |
| Revolving                credit facility                    |   | $        | 0       |     | $      | 50,000 |   |
|                                                        |   |     |    |     |   |   |   |
| **Long-term                debt**                           |   |     |    |     |   |   |   |
| 4.75%                Senior Convertible Notes due June 2012 |   | $        | 149,999 |     | $      | 150,000 |   |
| Capital                lease obligations                    |   |     | 12,853  |     |   | 24,825 |   |
| 6.07%                mortgage note, due October 2014        |   |     | 11,696  |     |   | 12,261 |   |
| 6.53%                mortgage note, due November 2012       |   |     | 8,050   |     |   | 9,450 |   |
| 7.77%                mortgage note due December 2011        |   |     | 8,496   |     |   | 9,050 |   |
| Other                long-term debt                         |   |     | 917     |     |   | 1,158 |   |
| Total                long-term debt                         |   |     | 192,011 |     |   | 206,744 |   |
| Less                current portion                         |   |     | 10,887  |     |   | 14,765 |   |
|                                                        |   | $        | 181,124 |     | $      | 191,979 |   |

**“**
**NOTE      2. ACQUISITION OF CROSSTOWN TRADERS, INC.**
**”**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

| **(In                thousands)**        |   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |   |
|------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
|                                     |   |     |   |     |   |     |   |     |   |     |   |
| Capital                lease obligations |   | $        | 8,026  |     | $      | 4,425    |   | $        | 402    |     | $      | 0 |   | $ | 0 |   |
| Mortgage                notes            |   |     | 2,617  |     |   | 2,707    |   |     | 2,801  |     |   | 2,901 |   |   | 7,984 |   |
| Other                long-term debt      |   |     | 244    |     |   | 251      |   |     | 258    |     |   | 120 |   |   | 15 |   |
|                                     |   | $        | 10,887 |     | $      | 7,383    |   | $        | 3,461  |     | $      | 3,021 |   | $ | 7,999 |   |

**-      **
**-      **
**-      **
**-      **

**NOTE      9. STOCKHOLDERS’ EQUITY**

|   | · | 1,000,000                shares of Series Participating Preferred Stock, $1.00 par value,                of which                500,000 shares of Participating Series A Junior Preferred Stock,                $1.00 par                value, have been authorized; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 300,000,000                shares of common stock, $.10 par                value. |
|--------|--------|-----------------------------------------------------------------------------------|

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      10. SHAREHOLDER RIGHTS PLAN**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      11. STOCK-BASED COMPENSATION PLANS**

***2004      Stock Award and Incentive Plan***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                                 |   | **2007** |      | **2006** |   | **2005**  |   |
|----------------------------------------------------------------------|--------|----------|-----------|----------|--------|-----------|--------|
|                                                                 |   |     |      |     |   |      |   |   |   |   |
| Restricted                stock awards/RSUs granted             |   |     | 926,346   |     |   | 1,092,915 |   |   | 270,900 |   |
| Weighted                average market price at date of grant   |   |     | $13.21    |     |   | $8.51     |   |   | $9.00 |   |
| Stock                awards/RSUs vested with issuance deferred  |   |     | 305,250   |     |   | 104,000   |   |   | 18,000 |   |
| Shares                issued under stock awards/RSUs            |   |     | 17,312    |     |   | 5,769     |   |   | 0 |   |
| Cancellations                of restricted stock awards         |   |     | 11,131    |     |   | 37,500    |   |   | 0 |   |
| Restricted                awards outstanding at year-end        |   |     | 1,791,199 |     |   | 1,198,546 |   |   | 252,900 |   |
| Options                exercisable at year-end                  |   |     | 0         |     |   | 0         |   |   | 0 |   |

***2003      Non-Employee Directors Compensation Plan***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                          |   | **2007** |    | **2006** |   | **2005** |   |
|---------------------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                                                          |   |     |    |     |   |     |   |   |   |   |
| One-time                restricted stock awards granted       |   |     | 10,000  |     |   | 10,000   |   |   | 10,000 |   |
| Weighted                average market price at date of grant |   |     | $13.84  |     |   | $12.48   |   |   | $7.65 |   |
| Shares                issued under stock awards               |   |     | 3,334   |     |   | 3,333    |   |   | 13,333 |   |
| Restricted                awards outstanding at year-end      |   |     | 20,000  |     |   | 13,334   |   |   | 6,667 |   |
| RSUs                granted                                   |   |     | 61,233  |     |   | 55,582   |   |   | 24,658 |   |
| Weighted                average market price at date of grant |   |     | $11.33  |     |   | $9.29    |   |   | $8.42 |   |
| Shares                issued under RSUs                       |   |     | 5,148   |     |   | 25,834   |   |   | 15,658 |   |
| RSUs                vested with issuance deferred             |   |     | 37,500  |     |   | 9,000    |   |   | 6,000 |   |
| RSUs                outstanding at year-end                   |   |     | 63,333  |     |   | 44,748   |   |   | 24,000 |   |
| Options                exercisable at year-end                |   |     | 283,140 |     |   | 455,225  |   |   | 333,325 |   |

***2000      Associates’ Stock Incentive Plan***

|                                                                |   | **2007** |    | **2006** |   | **2005**  |   |
|---------------------------------------------------------------------|--------|----------|---------|----------|--------|-----------|--------|
|                                                                |   |     |    |     |   |      |   |   |   |   |
| Restricted                stock awards granted                 |   |     | 0       |     |   | 0         |   |   | 439,500 |   |
| Weighted                average market price at date of grant  |   |     | -       |     |   | -         |   |   | $7.31 |   |
| Shares                issued under stock awards                |   |     | 57,815  |     |   | 46,551    |   |   | 23,572 |   |
| Cancellations                of restricted stock awards        |   |     | 91,950  |     |   | 53,000    |   |   | 21,903 |   |
| Restricted                awards outstanding at year-end       |   |     | 374,500 |     |   | 524,265   |   |   | 623,816 |   |
| Options                exercisable at year-end                 |   |     | 750,857 |     |   | 1,030,009 |   |   | 1,214,113 |   |

***1999      Associates’ Stock Incentive Plan***

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***1993      Employees’ Stock Incentive Plan***

|                                                                |   | **2007** |    | **2006** |   | **2005**  |   |
|---------------------------------------------------------------------|--------|----------|---------|----------|--------|-----------|--------|
|                                                                |   |     |    |     |   |      |   |   |   |   |
| Restricted                stock awards granted                 |   |     | 0       |     |   | 0         |   |   | 393,000 |   |
| Weighted                average market price at date of grant  |   |     | -       |     |   | -         |   |   | $7.20 |   |
| Shares                issued under stock awards                |   |     | 160,960 |     |   | 42,810    |   |   | 67,760 |   |
| Stock                awards vested with issuance deferred      |   |     | 0       |     |   | 90,000    |   |   | 90,000 |   |
| Cancellations                of restricted stock awards        |   |     | 0       |     |   | 0         |   |   | 11,400 |   |
| Restricted                awards outstanding at year-end       |   |     | 436,350 |     |   | 597,310   |   |   | 730,120 |   |
| Options                exercisable at year-end                 |   |     | 932,540 |     |   | 1,461,360 |   |   | 2,127,498 |   |

***1988      Key Employee Stock Option Plan***

**-**
**-**

**“**
**NOTE      1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES;**
** **
***Stock-based      Compensation***
**”**

|                                               |   | **2007** |   | **2006** |   | **2005** |   |
|----------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                               |   |     |   |     |   |     |   |   |   |   |
| Option                price equal to market price  |   | $        | 5.41   |     | $      | 2.44     |   | $ | 2.44 |   |
| Option                price less than market price |   |     | 13.06  |     |   | 8.67     |   |   | 7.70 |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                                 |   |       |       | **Average** |   |                             |   |
|----------------------------------------------------------------------|--------|------------|------------|-------------|--------|----------------------------------|--------|
|                                                                 |   | **Option** |       | **Option**  |   | **Option                Prices** |   |
|                                                                 |   | **Shares** |       | **Price**   |   | **Per                Share**     |   |
|                                                                 |   |       |       |        |   |                             |   |   |
| **Outstanding                at January 31, 2004**                   |   |       | 12,133,986 |        | $      | 5.637                            |   | $ | 1.000 |   | - |   | $ | 12.125 |   |
| Granted **-**option                price equal to market price  |   |       | 101,925    |        |   | 7.573                            |   |   | 6.590 |   | - |   |   | 8.440 |   |
| Granted **-**option                price less than market price |   |       | 12,000     |        |   | 1.000                            |   |   | 1.000 |   | - |   |   | 1.000 |   |
| Canceled/forfeited                                                   |   |       | (493,811   | )           |   | 10.019                           |   |   | 1.000 |   | - |   |   | 15.125 |   |
| Exercised                                                            |   |       | (6,249,634 | )           |   | 5.390                            |   |   | 1.000 |   | - |   |   | 8.460 |   |
| **Outstanding                at January 29, 2005**                   |   |       | 5,504,466  |        |   | 5.549                            |   |   | 1.000 |   | - |   |   | 8.460 |   |
| Granted **-**option                price equal to market price  |   |       | 55,582     |        |   | 9.287                            |   |   | 9.100 |   | - |   |   | 12.480 |   |
| Canceled/forfeited                                                   |   |       | (22,386    | )           |   | 5.516                            |   |   | 1.000 |   | - |   |   | 8.250 |   |
| Exercised                                                            |   |       | (1,865,554 | )           |   | 5.130                            |   |   | 1.000 |   | - |   |   | 8.460 |   |
| **Outstanding                at January 28, 2006**                   |   |       | 3,672,108  |        |   | 5.819                            |   |   | 1.000 |   | - |   |   | 12.480 |   |
| Granted **-**option                price equal to market price  |   |       | 61,233     |        |   | 11.332                           |   |   | 11.280 |   | - |   |   | 13.840 |   |
| Granted **-**option                price less than market price |   |       | 31,600     |        |   | 1.000                            |   |   | 1.000 |   | - |   |   | 1.000 |   |
| Canceled/forfeited                                                   |   |       | (10,571    | )           |   | 1.502                            |   |   | 1.000 |   | - |   |   | 6.650 |   |
| Exercised                                                            |   |       | (1,536,580 | )           |   | 5.965                            |   |   | 1.000 |   | - |   |   | 9.100 |   |
| **Outstanding                at February 3, 2007**                   |   |       | 2,217,790  |        | $      | 5.822                            |   | $ | 1.000 |   | - |   | $ | 13.840 |   |

|                                         |   |       |      |         |   | **Weighted**  |   |
|----------------------------------------------|--------|------------|-----------|--------------|--------|---------------|--------|
|                                         |   |       |      | **Weighted** |   | **Average**   |   |
|                                         |   |       |      | **Average**  |   | **Remaining** |   |
|                                         |   | **Option** |      | **Option**   |   | **Life**      |   |
| **Ranges                of Option Prices**   |   | **Shares** |      | **Price**    |   | **(Years)**   |   |
|                                         |   |       |      |         |   |          |   |   |   |   |
| **$0.00** **-                $1.00:**   |   |       |      |         |   |          |   |   |   |   |
| Options                outstanding           |   |       | 72,191    |         | $      | 1.000         |   |   | 2.8 |   |
| Options                exercisable           |   |       | 14,032    |         |   | 1.000         |   |   |   |   |
| **$1.01** **-                $5.00:**   |   |       |      |         |   |          |   |   |   |   |
| Options                outstanding           |   |       | 614,693   |         | $      | 3.973         |   |   | 1.8 |   |
| Options                exercisable           |   |       | 614,693   |         |   | 3.973         |   |   |   |   |
| **$5.01** **-                $10.00:**  |   |       |      |         |   |          |   |   |   |   |
| Options                outstanding           |   |       | 1,466,591 |         | $      | 6.591         |   |   | 3.6 |   |
| Options                exercisable           |   |       | 1,443,624 |         |   | 6.583         |   |   |   |   |
| **$10.01** **-                $13.84:** |   |       |      |         |   |          |   |   |   |   |
| Options                outstanding           |   |       | 64,315    |         | $      | 11.387        |   |   | 9.4 |   |
| Options                exercisable           |   |       | 4,315     |         |   | 12.869        |   |   |   |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

***Employee      Stock Purchase Plan***

**NOTE      12. CUSTOMER LOYALTY CARD PROGRAMS**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      13. EMPLOYEE RETIREMENT BENEFIT PLANS**

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      14. EXPENSES RELATED TO COST REDUCTION PLAN**

*“Accounting      for Costs Associated with Exit or Disposal Activities,”*

**NOTE      15. NET INCOME PER SHARE**

| **(In                thousands)**                                                       |   | **2007** |    | **2006** |   | **2005** |   |
|-----------------------------------------------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                                                                                    |   |     |    |     |   |     |   |   |   |   |
| Basic                weighted average common shares outstanding                    |   |     | 122,388 |     |   | 119,831  |   |   | 116,196 |   |
| Dilutive                effect of assumed conversion of convertible notes          |   |     | 15,182  |     |   | 15,182   |   |   | 15,182 |   |
| Dilutive                effect of stock options                                    |   |     | 2,193   |     |   | 2,051    |   |   | 1,796 |   |
| Diluted                weighted average common shares and equivalents outstanding  |   |     | 139,763 |     |   | 137,064  |   |   | 133,174 |   |
|                                                                                    |   |     |    |     |   |     |   |   |   |   |
| Net                income                                                          |   | $        | 108,923 |     | $      | 99,391   |   | $ | 64,526 |   |
| Decrease                in interest expense from assumed conversion of notes,           |   |     |    |     |   |     |   |   |   |   |
| net                of income taxes                                                      |   |     | 4,514   |     |   | 4,514    |   |   | 4,539 |   |
| Net                income used to determine diluted earnings per share             |   | $        | 113,437 |     | $      | 103,905  |   | $ | 69,065 |   |

|                                                     |   | **2007** |   | **2006** |   | **2005** |   |
|----------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                     |   |     |   |     |   |     |   |   |   |   |
| Number                of shares (thousands)              |   |     | 1      |     |   | 0        |   |   | 369 |   |
| Weighted                average exercise price per share |   | $        | 13.84  |     | $      | 0.00     |   | $ | 8.28 |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      16. ASSET SECURITIZATION**

| **(In                thousands)**                     |   | **2007** |   | **2006** |   | **2005** |   |
|-------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                  |   |     |   |     |   |     |   |   |   |   |
| Additions                to the I/O strip             |   | $        | 25,425 |     | $      | 24,861   |   | $ | 12,396 |   |
| Amortization                and valuation adjustments |   |     | 24,608 |     |   | 20,190   |   |   | 11,214 |   |
| Value                of the I/O strip at end of year  |   |     | 15,878 |     |   | 15,061   |   |   | 10,390 |   |

** **

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**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

| **(In                thousands)**                              |   | **2007** |   | **2006** |   | **2005** |   |
|----------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                           |   |     |   |     |   |     |   |   |   |   |
| Additions                to the servicing liability            |   | $        | 2,972  |     | $      | 3,661    |   | $ | 2,828 |   |
| Amortization                of the servicing liability         |   |     | 3,166  |     |   | 3,768    |   |   | 3,474 |   |
| Value                of the servicing liability at end of year |   |     | 2,103  |     |   | 2,297    |   |   | 2,404 |   |

| **(In                thousands)**                                             |   | **2007** |    | **2006** |   | **2005** |   |
|-------------------------------------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                                                                          |   |     |    |     |   |     |   |   |   |   |
| Proceeds                from sales of new receivables to QSPE                 |   | $        | 619,597 |     | $      | 638,624  |   | $ | 335,875 |   |
| Collections                reinvested in revolving-period securitizations     |   |     | 701,859 |     |   | 616,336  |   |   | 409,796 |   |
| Cash                flows received on retained interests                      |   |     | 73,899  |     |   | 63,586   |   |   | 46,999 |   |
| Servicing                fees received                                        |   |     | 6,981   |     |   | 6,510    |   |   | 4,826 |   |
| Net                credit losses                                              |   |     | 16,822  |     |   | 21,229   |   |   | 18,003 |   |
| Investor                certificates outstanding at end of year               |   |     | 358,100 |     |   | 354,040  |   |   | 295,750 |   |
| Credit                card balances 90 or more days delinquent at end of year |   |     | 9,904   |     |   | 9,037    |   |   | 7,952 |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                               |   | **February                  3,** |                           | **January                  28,** |   |
|----------------------------------------------------|--------|----------------------------------|--------------------------------|----------------------------------|--------|
|                                               |   | **2007**                         |                           | **2006**                         |   |
|                                               |   |                             |                           |                             |   |   |   |
| Payment                  rate                      |   |                             | 12.1-17.6%                     |                             |   | 11.7-17.2% |   |
| Residual                  cash flows discount rate |   |                             | 15.5-16.5%                     |                             |   | 15.5% |   |
| Net                  credit loss percentage        |   |                             | 6.0-11.0%                      |                             |   | 8.5-12.8% |   |
| Average                  life of receivables sold  |   |                             | 0.5-0.7                  years |                             |   | 0.5-0.7                  years |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

*“Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities.”*

| **(In                thousands)**                |   | **10%                Change** |   | **20%                Change** |   |
|--------------------------------------------------|--------|-------------------------------|--------|-------------------------------|--------|
|                                             |   |                          |   |                          |   |   |   |
| Payment                rate                      |   | $                             | 1,147  |                          | $      | 2,086 |   |
| Residual                cash flows discount rate |   |                          | 62     |                          |   | 123 |   |
| Credit                loss percentage            |   |                          | 864    |                          |   | 1,735 |   |

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**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

| **(In                  thousands)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **2007** |    | **2006** |   | **2005** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |     |    |     |   |     |   |   |   |   |
| Net                  funding received from sales of receivables:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |     |    |     |   |     |   |   |   |   |
| LANE                  BRYANT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $        | 350,270 |     | $      | 332,885  |   | $ | 284,426 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |     | --      | (1)      |   | --       | (1)    |   | 96,717 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |     |    |     |   |     |   |   |   |   |
| Net                  accounts receivable balance held by third party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |     |    |     |   |     |   |   |   |   |
| at                  end of year:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |     |    |     |   |     |   |   |   |   |
| LANE                  BRYANT(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |     | 233,793 |     |   | 209,368  |   |   | 199,098 |   |
| CATHERINES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |     | --      | (1)      |   | --       | (1)    |   | 58,167 |   |
| ____________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |     |    |     |   |     |   |   |   |   |
| *(1)* *Spirit                  of America National Bank acquired the CATHERINES portfolio in Fiscal                  2006.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| *(2)* *The                  LANE BRYANT net accounts receivable balances include amounts allocated                  to                  the use of the LANE BRYANT credit card at our LANE BRYANT stores                  and                  amounts allocated to the use of the LANE BRYANT credit card through                  a                  third-party catalog program. Our option to purchase the LANE BRYANT                  credit                  card receivables applies only to the receivables associated with                  accounts                  whose primary use of the credit card is at our LANE BRYANT                  stores.*  |

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**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      17. LEASES**

| **(In                thousands)** |   | **2007** |    | **2006** |   | **2005** |   |
|-----------------------------------|--------|----------|---------|----------|--------|----------|--------|
|                              |   |     |    |     |   |     |   |   |   |   |
| Minimum                rent       |   | $        | 236,839 |     | $      | 207,534  |   | $ | 193,256 |   |
| Contingent                rent    |   |     | 39,364  |     |   | 34,785   |   |   | 32,709 |   |
|                              |   | $        | 276,203 |     | $      | 242,319  |   | $ | 225,965 |   |

**-      **
**-      **
**-      **
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**-      **

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

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      18. SEGMENT REPORTING**

**“NOTE      2. ACQUISITION OF CROSSTOWN TRADERS, INC.’**

**“**
**NOTE      1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
**”      **

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**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                                                                                                                                                    |   | **Retail**        |      | **Direct-to-**      |   | **Corporate**                |   |             |     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|---------------------|--------|------------------------------|--------|------------------|----------|
| **(In                thousands)**                                                                                                                       |   | **Stores****(1)** |      | **Consumer****(2)** |   | **and                Other** |   | **Consolidated** |     |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **Fiscal                2007**                                                                                                                          |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Net                sales                                                                                                                           |   | $                 | 2,636,409 |                | $      | 427,760                      |   | $                | 3,348    |   | $ | 3,067,517 |   |
| Depreciation                and amortization                                                                                                       |   |              | 46,746    |                |   | 3,790                        |   |             | 40,708   |   |   | 91,244 |   |
| Income                before interest and taxes                                                                                                    |   |              | 253,982   |                |   | 15,798                       |   |             | (88,911  | ) |   | 180,869 |   |
| Interest                expense                                                                                                                    |   |              |      |                |   |                         |   |             | (14,746  | ) |   | (14,746 | ) |
| Income                tax provision                                                                                                                |   |              |      |                |   |                         |   |             | (57,200  | ) |   | (57,200 | ) |
| Net                income                                                                                                                          |   |              | 253,982   |                |   | 15,798                       |   |             | (160,857 | ) |   | 108,923 |   |
| Capital                expenditures                                                                                                                |   |              | 103,510   |                |   | 9,954                        |   |             | 19,692   |   |   | 133,156 |   |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **As                of February 3, 2007**                                                                                                               |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Total                assets                                                                                                                        |   | $                 | 869,776   |                | $      | 346,741                      |   | $                | 494,425  |   | $ | 1,710,942 |   |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **Fiscal                2006**                                                                                                                          |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Net                sales                                                                                                                           |   | $                 | 2,452,657 |                | $      | 298,888                      |   | $                | 4,180    |   | $ | 2,755,725 |   |
| Depreciation                and amortization                                                                                                       |   |              | 44,031    |                |   | 1,235                        |   |             | 39,031   |   |   | 84,297 |   |
| Income                before interest and taxes                                                                                                    |   |              | 237,462   |                |   | 19,918                       |   |             | (87,068  | ) |   | 170,312 |   |
| Interest                expense                                                                                                                    |   |              |      |                |   |                         |   |             | (17,911  | ) |   | (17,911 | ) |
| Income                tax provision                                                                                                                |   |              |      |                |   |                         |   |             | (53,010  | ) |   | (53,010 | ) |
| Net                income                                                                                                                          |   |              | 237,462   |                |   | 19,918                       |   |             | (157,989 | ) |   | 99,391 |   |
| Capital                expenditures                                                                                                                |   |              | 74,598    |                |   | 2,394                        |   |             | 26,843   |   |   | 103,835 |   |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **As                of January 28, 2006**                                                                                                               |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Total                assets                                                                                                                        |   | $                 | 745,751   |                | $      | 345,357                      |   | $                | 481,475  |   | $ | 1,572,583 |   |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **Fiscal                2005**                                                                                                                          |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Net                sales                                                                                                                           |   | $                 | 2,330,483 |                |   |                         |   | $                | 4,253    |   | $ | 2,334,736 |   |
| Depreciation                and amortization                                                                                                       |   |              | 44,341    |                |   |                         |   |             | 32,728   |   |   | 77,069 |   |
| Income                before interest and taxes                                                                                                    |   |              | 196,360   |                |   |                         |   |             | (79,082  | ) |   | 117,278 |   |
| Interest                expense                                                                                                                    |   |              |      |                |   |                         |   |             | (15,610  | ) |   | (15,610 | ) |
| Income                tax provision                                                                                                                |   |              |      |                |   |                         |   |             | (37,142  | ) |   | (37,142 | ) |
| Net                income                                                                                                                          |   |              | 196,360   |                |   |                         |   |             | (131,834 | ) |   | 64,526 |   |
| Capital                expenditures                                                                                                                |   |              | 34,115    |                |   |                         |   |             | 26,450   |   |   | 60,565 |   |
|                                                                                                                                                    |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| **As                of January 29, 2005**                                                                                                               |   |              |      |                |   |                         |   |             |     |   |   |   |   |
| Total                assets                                                                                                                        |   | $                 | 700,448   |                |   |                         |   | $                | 603,323  |   | $ | 1,303,771 |   |
| *____________________*                                                                                                                             |
| *(1)* *Fiscal                2007 i**ncludes                82 LANE BRYANT OUTLET stores and 45 PETITE SOPHISTICATE OUTLET                stores.* |
| *(2)* *From                date of acquisition of Crosstown Traders, Inc. on June 2,                2005.*                                         |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

|                              |   | **February                3,** |    | **January                28,** |   |
|-----------------------------------|--------|--------------------------------|---------|--------------------------------|--------|
| **(In                thousands)** |   | **2007**                       |    | **2006**                       |   |
|                              |   |                           |    |                           |   |   |   |
| **Retail                Stores:** |   |                           |    |                           |   |   |   |
| LANE                BRYANT        |   | $                              | 23,436  |                           | $      | 23,436 |   |
| CATHERINES                        |   |                           | 43,230  |                           |   | 43,230 |   |
|                              |   |                           |    |                           |   |   |   |
| **Direct-to-Consumer:**           |   |                           |    |                           |   |   |   |
| Crosstown                Traders  |   |                           | 86,704  |                           |   | 87,887 |   |
|                              |   | $                              | 153,370 |                           | $      | 154,553 |   |

**NOTE      19. FAIR VALUE OF FINANCIAL INSTRUMENTS**

|                                                   |   | **February                3, 2007** |    | **January                28, 2006** |   |
|--------------------------------------------------------|--------|-------------------------------------|---------|-------------------------------------|--------|
|                                                   |   | **Carrying**                        |    | **Fair**                            |   | **Carrying** |   | **Fair** |   |
| **(In                thousands)**                      |   | **Amount**                          |    | **Value**                           |   | **Amount** |   | **Value** |   |
|                                                   |   |                                |    |                                |   |   |   |   |   |   |   |   |   |
| **Assets:**                                            |   |                                |    |                                |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents               |   | $                                   | 143,838 |                                | $      | 143,838 |   | $ | 130,132 |   | $ | 130,132 |   |
| Available-for-sale                securities           |   |                                | 1,997   |                                |   | 1,997 |   |   | 20,150 |   |   | 20,150 |   |
| Investment                in asset-backed securities   |   |                                | 60,643  |                                |   | 60,643 |   |   | 66,828 |   |   | 66,828 |   |
|                                                   |   |                                |    |                                |   |   |   |   |   |   |   |   |   |
| **Liabilities:**                                       |   |                                |    |                                |   |   |   |   |   |   |   |   |   |
| 4.75%                Senior Convertible Notes due 2012 |   |                                | 149,999 |                                |   | 205,686 |   |   | 150,000 |   |   | 203,610 |   |
| Revolving                credit facility               |   |                                | 0       |                                |   | 0 |   |   | 50,000 |   |   | 50,000 |   |
| 6.07%                mortgage note, due October 2014   |   |                                | 11,696  |                                |   | 11,410 |   |   | 12,261 |   |   | 12,151 |   |
| 6.53%                mortgage note, due November 2012  |   |                                | 8,050   |                                |   | 7,939 |   |   | 9,450 |   |   | 9,397 |   |
| 7.77%                mortgage note, due December 2011  |   |                                | 8,496   |                                |   | 8,675 |   |   | 9,050 |   |   | 9,386 |   |
| Other                long-term debt                    |   |                                | 917     |                                |   | 854 |   |   | 1,158 |   |   | 1,016 |   |

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**Table          of Contents**

**CHARMING      SHOPPES, INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**YEAR      ENDED FEBRUARY 3, 2007**

**(Continued)**

**NOTE      20. QUARTERLY FINANCIAL INFORMATION (Unaudited)**

|                                                                                                                                                                                                                                                                                                            |   | **First**   |    | **Second**  |   | **Third**   |   | **Fourth**  |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|-------------|--------|-------------|--------|-------------|---------|
| **(In                thousands, except per share amounts)**                                                                                                                                                                                                                                                     |   | **Quarter** |    | **Quarter** |   | **Quarter** |   | **Quarter** |    |
|                                                                                                                                                                                                                                                                                                            |   |        |    |        |   |        |   |        |    |   |   |   |   |
| **Fiscal                2007**(1)                                                                                                                                                                                                                                                                               |   |        |    |        |   |        |   |        |    |   |   |   |   |
| Net                sales                                                                                                                                                                                                                                                                                        |   | $           | 734,922 |        | $      | 763,353     |   | $           | 695,278 |   | $ | 873,964 |   |
| Gross                profit                                                                                                                                                                                                                                                                                     |   |        | 233,850 | (2)         |   | 228,753     | (2)    |        | 214,460 | (2) |   | 248,570 |   |
| Net                income                                                                                                                                                                                                                                                                                       |   |        | 32,061  |        |   | 32,563      |   |        | 19,357  |   |   | 24,942 |   |
| Basic                net income per share                                                                                                                                                                                                                                                                       |   | $           | .26     |        | $      | .27         |   | $           | .16     |   | $ | .20 |   |
| Diluted                net income per share                                                                                                                                                                                                                                                                     |   |        | .24     |        |   | .24         |   |        | .15     |   |   | .19 |   |
|                                                                                                                                                                                                                                                                                                            |   |        |    |        |   |        |   |        |    |   |   |   |   |
| **Fiscal                2006**(1)                                                                                                                                                                                                                                                                               |   |        |    |        |   |        |   |        |    |   |   |   |   |
| Net                sales                                                                                                                                                                                                                                                                                        |   | $           | 603,353 |        | $      | 689,075     |   | $           | 663,677 |   | $ | 799,620 |   |
| Gross                profit                                                                                                                                                                                                                                                                                     |   |        | 200,650 |        |   | 220,907     |   |        | 200,189 |   |   | 219,632 |   |
| Net                income                                                                                                                                                                                                                                                                                       |   |        | 30,017  |        |   | 39,424      |   |        | 10,762  |   |   | 19,188 |   |
| Basic                net income per share                                                                                                                                                                                                                                                                       |   | $           | .25     |        | $      | .33         |   | $           | .09     |   | $ | .16 |   |
| Diluted                net income per share                                                                                                                                                                                                                                                                     |   |        | .23     |        |   | .30         |   |        | .09     |   |   | .15 |   |
| *____________________*                                                                                                                                                                                                                                                                                     |
| *(1)* *Fiscal                2007 is a 53-week fiscal year consisting of three 12-week quarters                and a                fourth quarter of 17 weeks. Fiscal 2006 is a 52-week fiscal year                consisting of three 12-week quarters and a fourth quarter of 16                weeks.* |
| *(2)* *Includes                reclassifications to conform to fourth-quarter and full-year                presentation.*                                                                                                                                                                             |

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**Table          of Contents**

**Item      9. Changes In and Disagreements With Accountants on Accounting and Financial      Disclosure**

**Item      9A. Controls and Procedures**

**Evaluation      of Disclosure Controls and Procedures**

**Evaluation      of Internal Control Over Financial Reporting**

**Changes      in Internal Control Over Financial Reporting**

**Item      9B. Other Information**

----

**Table          of Contents**

**PART      III**

**Item      10. Directors, Executive Officers****,      and Corporate Governance**

**“Directors      Standing for Election,”**
**“Biographies      of Directors,”**
**“Corporate      Governance at Charming Shoppes,”**
**“Compensation      of Directors,”**
**“Section      16(a) Beneficial Ownership Reporting Compliance”**
**“Additional      Part I Information - Our Executive Officers,”**

**www.charmingshoppes.com**
**“About      Us”**
**“Corporate      Governance”**

**Item      11. Executive Compensation**

**“Compensation      of Executive Officers”**
**“Report      of the Compensation Committee”**
** **

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

**“Equity      Compensation Plan Information”**
**“Principal      Shareholders and Management Ownership”**

----

**Table          of Contents**

**Item      13. Certain Relationships and Related Transactions****,      and Director Independence**

**“Corporate      Governance at Charming Shoppes”**
**“Compensation      Committee Interlocks and Insider Participation”**

**Item      14. Principal Accountant Fees and Services**

**“Audit      and Other Fees”**

----

**Table          of Contents**

**PART      IV**

**Item      15. Exhibits and Financial Statement Schedules**

|                                                                                                                                                                                              | **Page** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                                                                                                              |     |
| Management’s                Report on Internal Control over Financial                Reporting                                                                                              | 56       |
|                                                                                                                                                                                              |     |
| Report                of Independent Registered Public                Accounting Firm on Internal Control Over Financial                Reporting                                       | 57-58    |
|                                                                                                                                                                                              |     |
| Report                of Independent Registered Public Accounting                Firm                                                                                                             | 59       |
|                                                                                                                                                                                              |     |
| Consolidated                Balance Sheets - January 28, 2006 and                January 29, 2005                                                                                                 | 60       |
|                                                                                                                                                                                              |     |
| Consolidated                Statements of Operations and Comprehensive                Income - Years Ended January 28, 2006, January 29, 2005, and January                31,                2004 | 61       |
|                                                                                                                                                                                              |     |
| Consolidated                Statements of Stockholders' Equity                - Years Ended January 28, 2006, January 29, 2005, and January 31,                2004                               | 62       |
|                                                                                                                                                                                              |     |
| Consolidated                Statements of Cash Flows - Years Ended                January 28, 2006, January 29, 2005, and January 31,                2004                                         | 63       |
|                                                                                                                                                                                              |     |
| Notes                to Consolidated Financial                Statements                                                                                                                          | 64       |

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**Table          of Contents**

**Plan      of Acquisition, Reorganization, Arrangement, Liquidation, or      Succession**

| 2.1    | Covenant                Agreement, dated as of August 16, 2001, between Charming Shoppes,                Inc. and                Limited Brands, Inc., incorporated by reference to Form 8-K of the                Registrant dated August 16, 2001, filed on August 31, 2001. (Exhibit                2.3).                                                                                                                                                                                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.2    | Master                Sublease, dated as of August 16, 2001, between Limited Brands, Inc.                and                Lane Bryant, Inc., incorporated by reference to Form 8-K of the Registrant                dated August 16, 2001, filed on August 31, 2001. (Exhibit                2.4).                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.3    | Stock                Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition                Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown                Traders, Inc. whose names are set forth on the signature pages thereto                and                J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,                incorporated by reference to Form 8-K of the Registrant dated June                2,                2005, filed on June 8, 2005. (File No. 000-07258, Exhibit                2.1). |

**Articles      of Incorporation and By-Laws**

| 3.1    | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994. (File No.                000-07258, Exhibit 3.1). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                    |
| 3.2    | By-Laws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 3.2).          |

**Instruments      Defining the Rights of Security Holders, Including      Indentures**

| 4.1    | Amended                and Restated Rights Agreement, dated as of February 1, 2001, between                Charming Shoppes, Inc. and American Stock Transfer & Trust Company, as                Rights Agent, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended February 3, 2001. (File No. 000-07258, Exhibit                4.1). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 4.2    | Registration                Agreement, dated as of August 16, 2001, between Charming Shoppes,                Inc. and                Limited Brands, Inc., incorporated by reference to Form 8-K of the                Registrant dated August 16, 2001, filed on August 31, 2001. (File                No.                000-07258, Exhibit 4.1).                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 4.3    | Indenture,                dated as of May 28, 2002, between Charming Shoppes, Inc. and Wachovia                Bank, National Association, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended May 4, 2002. (File No. 000-07258,                Exhibit                4.1).                                                                   |

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**Table          of Contents**

| 4.4    | Registration                Rights Agreement, dated as of May 28, 2002, by and among Charming                Shoppes,                Inc., as Issuer, and J. P. Morgan Securities, Inc., Bear Stearns&                Co., Inc., First Union Securities, Inc., Lazard Freres & Co., LLC, and                McDonald Investments, Inc., as Initial Purchasers, incorporated by                reference to Form 10-Q of the Registrant for the quarter ended May                4,                2002. (File No. 000-07258, Exhibit 4.2).                                                                                                                                                                                                                                                                                                                                     |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.5    | Second                Amended and Restated Loan and Security Agreement, dated July 28,                2005, by                and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc.,                CSI                Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation,                Lane                Bryant, Inc., and Crosstown Traders, Inc. as borrowers; a syndicate                of                banks and other financial institutions as lenders, including Wachovia                Bank, National Association as agent for the lenders; and certain                of the                Company’s subsidiaries as guarantors, incorporated by reference to Form                8-K of the Registrant dated July 28, 2005, filed on August 3, 2005.                (File                No. 000-07258, Exhibit 10.1).         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.6    | Amendment                No. 1, dated as of May 17, 2006, to Second Amended and Restated Loan                and                Security Agreement, dated July 28, 2005, by and among Charming Shoppes,                Inc., Charming Shoppes of Delaware, Inc., CSI Industries, Inc., FB                Apparel, Inc., Catherines Stores Corporation, Lane Bryant, Inc.,                and                Crosstown Traders, Inc. as borrowers; a syndicate of banks and other                financial institutions as lenders, including Wachovia Bank, National                Association as agent for the lenders; and certain of the Company’s                subsidiaries as guarantors, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 29, 2006. (File No. 000-07258,                Exhibit 99.1). |

**Material      Contracts**

| 10.1.1 | Second                Amended and Restated Pooling and Servicing Agreement, dated as of                November                25, 1997, as amended on July 22, 1999, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and First                Union                National Bank as Trustee, incorporated by reference to Form 8-K of                Charming Shoppes Master Trust and Charming Shoppes Receivables Corp.,                (File No. 333-71757) dated July 22, 1999. (Exhibit No.                4.1).                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1.2 | Fourth                Amendment, dated as of August 5, 2004, to Second Amended and Restated                Pooling and Servicing Agreement, dated as of November 25, 1997, as                amended                on July 22, 1999 and on May 8, 2001, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and Wachovia                Bank,                National Association (formerly known as First Union National Bank)                as                Trustee, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended July 31, 2004 (File No. 000-07258, Exhibit                10.4). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1.3 | Amendment,                dated as of March 18, 2005, to Second Amended and Restated Pooling                and                Servicing Agreement, dated as of November 25, 1997, as amended on                July 22,                1999, May 8, 2001, and August 5, 2004, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and Wachovia                Bank,                National Association, as Trustee, incorporated by reference to Form                10-K                of the Registrant for the fiscal year ended January 29, 2005. (File                No.                000-07258, Exhibit 10.1.3).                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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**Table          of Contents**

| 10.1.4  | Series                1999-1 Supplement, dated as of July 22, 1999, to Second Amended and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999, among Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and First Union National                Bank, as Trustee, for $150,000,000 Charming Shoppes Master Trust                Asset-Backed Certificates Series 1999-1, incorporated by reference                to Form                8-K of Charming Shoppes Master Trust and Charming Shoppes Receivables                Corp., (File No. 333-71757) dated July 22, 1999. (Exhibit No.                4.2). |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.5  | Receivables                Purchase Agreement, dated as of May 28, 1999, among Charming Shoppes                Seller, Inc. as Seller, Spirit of America, Inc., as Servicer, Clipper                Receivables Corporation, as Purchaser, State Street Capital Corporation,                as Administrator, and State Street Bank & Trust Company, as                Relationship Bank, incorporated by reference to Form 10-K of the                Registrant for the fiscal year ended February 2, 2002. (File No.                000-07258, Exhibit 10.1.4).                                                                                                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.6  | Series                1999-2 Supplement, dated as of May 28, 1999, to Second Amended and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999, among Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and First Union National                Bank, as Trustee, for $55,750,000 Charming Shoppes Master Trust                Asset-Backed Certificates Series 1999-2, incorporated by reference                to Form                10-K of the Registrant for the fiscal year ended January 29, 2000.                (File                No. 000-07258, Exhibit 10.1.23).                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.7  | Series                2000-VFC Supplement, dated as of November 9, 2000, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997,                among Charming Shoppes Receivables Corp., as Seller, Spirit of America,                Inc., as Servicer, and First Union National Bank, as Trustee, on                behalf of                the Series 2000-VFC Certificateholders, for up to $60,122,700 Charming                Shoppes Master Trust Series 2000-VFC, incorporated by reference to                Form                10-K of the Registrant for the fiscal year ended February 3, 2001.                (File                No. 000-07258, Exhibit 10.1.16).        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.8  | Certificate                Purchase Agreement, dated as of November 9, 2000, among Charming                Shoppes                Receivables Corp. as Seller and as the Class B Purchaser, Spirit                of                America, Inc. as Servicer, Monte Rosa Capital Corporation as the                Conduit                Purchaser, and ING Baring (U.S.) Capital Markets LLC as Administrator                for                the Conduit Purchaser, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended February 3, 2001. (File No.                000-07258, Exhibit 10.1.17).                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.9  | Purchase                Agreement dated as of March 14, 2005 between Citibank USA, N.A.,                Spirit of                America National Bank and Catherines, Inc., incorporated by reference                to                Form 8-K of the Registrant dated March 18, 2005, filed on March 22,                2005.                (File No. 000-07258, Exhibit 99).                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.10 | Credit                Card Processing Agreement, among World Financial Network National                Bank,                Lane Bryant, Inc., and Sierra Nevada Factoring, Inc., dated as of                January                31, 1996, incorporated by reference to Form 10-K of the Registrant                for the                fiscal year ended February 2, 2002. (File No. 000-07258, Exhibit                10.1.9).                                                                                                                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.11 | Amendment                to Credit Card Processing Agreement, among World Financial Network                National Bank, Lane Bryant, Inc., and Sierra Nevada Factoring, Inc.,                dated                as of January 28, 2005, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended January 29, 2005. (File No.                000-07258, Exhibit 10.1.12).                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.12 | Purchase                and Sale Agreement, among Spirit of America National Bank, as Seller,                and                Charming Shoppes Receivables Corp., as Purchaser, dated as of November                25,                1997, incorporated by reference to Form S-1/A of Charming Shoppes                Receivables Corp. (File No. 333-71757, Exhibit 10.1(a)).                                                                                                                                                                                                                                                                                                                                                                                           |

----

**Table          of Contents**

| 10.1.13 | First                Amendment to Purchase and Sale Agreement, among Spirit of America                National                Bank, as Seller, and Charming Shoppes Receivables Corp., as Purchaser,                dated as of July 22, 1999, incorporated by reference to Form 8-K                of                Charming Shoppes Receivables Corp. (File No. 333-71757, Exhibit                10.1).                                                                                                                                                                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.14 | Series                2002-1 Supplement, dated as of November 20, 2002, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999 and on May 8, 2001, among Charming Shoppes                Receivables Corp., as Seller, Spirit of America, Inc., as Servicer,                and                Wachovia Bank, National Association, as Trustee, for $100,000,000                Charming                Shoppes Master Trust Asset-Backed Certificates Series 2002-1, incorporated                by reference to Form 10-Q of the Registrant for the quarter ended                November                2, 2002. (File No. 000-07258, Exhibit 10.1). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.15 | Charming                Shoppes Master Trust $63,500,000 Fixed Rate Class A Asset Backed                Certificates, Series 2002-1 and $16,500,000 Fixed Rate Class B Asset                Backed Certificates, Series 2002-1 Certificate Purchase Agreement,                dated                as of November 22, 2002, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.2).                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.16 | Certificate                Purchase Agreement, dated as of November 22, 2002, among Wachovia                Bank,                National Association, as Trustee, Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and The Class C Holders                described therein, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.3).                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.17 | Certificate                Purchase Agreement, dated as of November 22, 2002, among Wachovia                Bank,                National Association, as Trustee, Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and The Class D Holders                described therein, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.4).                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.18 | $14,000,000                Promissory Note, dated October 2002, between White Marsh Distribution,                LLC., as Borrower, and General Electric Capital Business Asset Funding                Corporation, as Payee and Holder, incorporated by reference to Form                10-Q                of the Registrant for the quarter ended November 2, 2002. (File No.                000-07258, Exhibit 10.5).                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.19 | Commercial                Deed of Trust, Security Agreement, Assignment of Leases and Rents,                and                Fixture Filing, made as of October 2002, among the Grantor, White                Marsh                Distribution, LLC, as Borrower, in favor of James M. Smith, as Trustee,                for the benefit of the Beneficiary, General Electric Capital Business                Asset Funding Corporation, as Lender, incorporated by reference to                Form                10-Q of the Registrant for the quarter ended November 2, 2002. (File                No.                000-07258, Exhibit 10.6).                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.20 | Certificate                Purchase Agreement, dated as of January 21, 2004, among Charming                Shoppes                Receivables Corp., as Seller and as the Class B Purchaser, Spirit                of                America, Inc., as Servicer, Sheffield Receivables Corporation, as                the                Conduit Purchaser, and Barclay’s Bank PLC as Administrator for the Conduit                Purchaser, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended January 31, 2004. (File No. 000-07258, Exhibit                10.1.17).                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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**Table          of Contents**

| 10.1.21 | Series                2004-VFC Supplement, dated as of January 21, 2004, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997 and                amended as of July 22, 1999 and as of May 8, 2001, among Charming                Shoppes                Receivables Corp., as Seller, Spirit of America, Inc., as Servicer,                and                Wachovia Bank, National Association, as Trustee on behalf of the                Series                2004-VFC Certificateholders, for up to $132,000,000 Charming Shoppes                Master Trust Asset-Backed Certificates Series 2004-VFC, incorporated                by                reference to Form 10-K of the Registrant for the fiscal year ended                January                31, 2004. (File No. 000-07258, Exhibit 10.1.18). |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.22 | Series                2004-1 Supplement, dated as of August 5, 2004, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997 (as                amended on July 22, 1999, on May 8, 2001 and on August 5, 2004),                among                Charming Shoppes Receivables Corp., as Seller, Spirit of America,                Inc., as                Servicer, and Wachovia Bank, National Association, as Trustee, on                behalf                of the Series 2004-1 Certificateholders, for $180,000,000 Charming                Shoppes                Master Trust Series 2004-1, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 31, 2004 (File No. 000-07258,                Exhibit 10.5).                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.23 | Certificate                Purchase Agreement, dated as of July 21, 2004, among Charming Shoppes                Receivables Corp., Fashion Service Corp., Spirit of America, Inc.,                and                Barclay’s Capital Inc. (as representative of the Initial Purchasers),                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended July 31, 2004 (File No. 000-07258, Exhibit 10.6).                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.24 | Certificate                Purchase Agreement, dated as of August 5, 2004, among Wachovia Bank,                National Association as Trustee, Charming Shoppes Receivables Corp.                as                Seller, Spirit of America, Inc. as Servicer, and Clipper Receivables                Company LLC as Initial Class C Holder, incorporated by reference                to Form                10-Q of the Registrant for the quarter ended July 31, 2004 (File                No.                000-07258, Exhibit 10.7).                                                                                                                                                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.25 | Mortgage,                Assignment of Leases and Rents and Security Agreement, dated as of                October                6, 2004, between FB Distro Distribution Center, LLC, as Mortgagor,                and                BankAtlantic Commercial Mortgage Capital, LLC, as Mortgagee, incorporated                by reference to Form 10-Q of the Registrant for the quarter ended                October                30, 2004 (File No. 000-07258, Exhibit 10.9).                                                                                                                                                                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.26 | $13,000,000                Mortgage Note, dated October 6, 2004, between FB Distro Distribution                Center, LLC, as Maker, and BankAtlantic Commercial Mortgage Capital,                LLC,                as Payee, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended October 30, 2004 (File No. 000-07258, Exhibit                10.10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.27 | Guaranty,                executed as of October 6, 2004, by Charming Shoppes, Inc., as Guarantor,                for the benefit of BankAtlantic Commercial Mortgage Capital, LLC,                as                Lender, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended October 30, 2004 (File No. 000-07258, Exhibit                10.11).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.28 | Hazardous                Substances Indemnity Agreement, dated October 6, 2004, by FB Distro                Distribution Center, LLC and by Charming Shoppes, Inc., jointly and                severally as Indemnitors, in favor of BankAtlantic Commercial Mortgage                Capital, LLC, as Holder, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended October 30, 2004 (File No. 000-07258,                Exhibit 10.12).                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

**Table          of Contents**

| 10.1.29 | Amended                and Restated Class D Certificate Purchase Agreement, dated as of                August                25, 2004, among Wachovia Bank, National Association as Trustee, Charming                Shoppes Receivables Corp. as Seller and as Initial Class D-1 Holder,                Spirit of America, Inc. as Servicer, and Clipper Receivables Company                LLC,                as the Class D-1 Holder, incorporated by reference to Form 8-K of                the                Registrant dated August 24, 2004, filed on August 27, 2004. (File                No.                000-07258, Exhibit 99.1).            |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.30 | Amended                and Restated Certificate Purchase Agreement, dated as of November                22, 2004                and Amended and Restated as of November 18, 2004, among Wachovia                Bank,                National Association as Trustee, Charming Shoppes Receivables Corp.                as                Seller, Spirit of America, Inc. as Servicer, and the Class D-2                Certificateholders Described Herein, incorporated by reference to                Form                10-Q of the Registrant for the quarter ended October 30, 2004 (File                No.                000-07258, Exhibit 10.13). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.31 | Amended                and Restated Receivables Purchase Agreement, dated as of June 2,                2005,                among Catalog Receivables LLC as Seller, Spirit of America, Inc.                as                Servicer, Sheffield Receivables Corporation as Purchaser, and Barclays                Bank PLC as Administrator, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 28, 2006 (File No. 000-07258,                Exhibit 10.1.31).                                                                                                                        |

**Management      Contracts and Compensatory Plans and Arrangements**

| 10.2.1 | The                1988 Key Employee Stock Option Plan of Charming Shoppes, Inc., as                amended                and restated January 25, 2006, incorporated by reference to Form                10-K of                the Registrant for the fiscal year ended January 28, 2006 (File No.                000-07258, Exhibit 10.2.1).                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.2 | Form                of Charming Shoppes, Inc. 1988 Key Employee Stock Option Plan Key                Employee                Stock Option Agreement, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended January 28, 2006 (File No. 000-07258,                Exhibit 10.2.2).                           |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.3 | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program,                As                Amended and Restated, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 10.1).                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.4 | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program,                As                Amended and Restated at June 27, 2002, incorporated by reference                to Form                10-K of the Registrant for the fiscal year ended February 1, 2003.                (File                No. 000-07258, Exhibit 10.2.6). |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.5 | The                Charming Shoppes, Inc. 2003 Non-Employee                Directors Compensation Plan, Amended and Restated Effective January                1,                2005.                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.6 | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program                Stock                Option Agreement, incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 31, 1999. (File No. 000-07258, Exhibit                10.2).                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.7 | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program                Restricted Stock Agreement, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 10.3).                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                  |

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**Table          of          Contents**

| 10.2.8  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Stock Option Agreement, incorporated by reference to Form 8-K of                the                Registrant dated June 23, 2005, filed on June 29, 2005. (File No.                000-07258, Exhibit 10.1).                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.9  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Restricted Share Units Agreement, incorporated by reference to Form                8-K of                the Registrant dated June 23, 2005, filed on June 29, 2005. (File                No.                000-07258, Exhibit 10.2).                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.10 | The                1993 Employees’ Stock Incentive Plan of Charming Shoppes, Inc.,                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended January 29, 1994. (File No. 000-07258, Exhibit                10.2.10).                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.11 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Restricted                Stock Agreement, dated as of February 11, 2002, incorporated by reference                to Form 10-K of the Registrant for the fiscal year ended February                2, 2002.                (File No. 000-07258, Exhibit 10.2.8).                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.12 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Stock Option                Agreement (regular vesting schedule), incorporated by reference to                Form                10-K of the Registrant for the fiscal year ended February 2, 2002.                (File                No. 000-07258, Exhibit 10.2.20).                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.13 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Stock Option                Agreement (accelerated vesting schedule), incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 2,                2002.                (File No. 000-07258, Exhibit 10.2.21).                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.14 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan                Performance-Accelerated Stock Option Agreement, incorporated by reference                to Form 10-K of the Registrant for the fiscal year ended February                2, 2002.                (File No. 000-07258, Exhibit 10.2.22).                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.15 | The                Charming Shoppes, Inc. Employee Stock Purchase Plan, as amended,                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 3, 1996. (File No. 000-07258, Exhibit                10.2.10).                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.16 | The                Charming Shoppes Inc. 1999 Associates’ Stock Incentive Plan, incorporated                by reference to Form 10-K of the Registrant for the fiscal year ended                January 30, 1999. (File No. 000-07258, Exhibit                10.2.24).                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.17 | Charming                Shoppes, Inc. 1999 Associates’ Stock Incentive Plan Stock Option                Agreement, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended January 30, 1999. (File No. 000-07258, Exhibit                10.2.25).                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.18 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan, incorporated by reference to Form 10-K of the Registrant                for the fiscal year ended February 3, 2001. (File No. 000-07258,                Exhibit                10.2.29).                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.19 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Stock Option Agreement (regular vesting schedule),                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 2, 2002. (File No. 000-07258, Exhibit                10.2.23). |
|    |                                                                                                                                                                                                                                                                                                                                                                                 |

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**Table          of Contents**

| 10.2.20 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Stock Option Agreement (accelerated vesting schedule),                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 2, 2002. (File No. 000-07258, Exhibit                10.2.24). |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.21 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Restricted Stock Agreement, incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 2,                2002.                (File No. 000-07258, Exhibit 10.2.25).                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.22 | 2004                Stock Award and Incentive Plan, incorporated by reference to Appendix                B of                the Registrant’s Proxy Statement Pursuant to Section 14 of the Securities                Exchange Act of 1934, filed on May 19, 2004.                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.23 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Stock Option Agreement,                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended October 30, 2004 (File No. 000-07258, Exhibit                10.15).                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.24 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Agreement - Section 16 Officers, incorporated by reference                to Form                8-K of the Registrant dated February 7, 2005, filed on February 11,                2005.                (File No. 000-07258, Exhibit 99.2)                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.25 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement, incorporated by reference to Form 8-K of the Registrant                dated February 7, 2005, filed on February 11, 2005. (File No. 000-07258,                Exhibit 99.4)                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.26 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Units Agreement, incorporated by reference to Form 8-K of the                Registrant dated March 15, 2006, filed on March 20, 2006. (File No.                000-07258, Exhibit 99.1)                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.27 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted Stock                Agreement - Associates Other Than Section 16 Officers, incorporated                by                reference to Form 10-Q of the Registrant for the quarter ended October                30,                2004 (File No. 000-07258, Exhibit 10.17).                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.28 | Charming                Shoppes, Inc. Supplemental Retirement Plan, effective February 1,                2003,                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended May 3, 2003. (File No. 000-07258, Exhibit 10.1).                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.29 | Amendment                2007-1, Charming Shoppes, Inc.                Supplemental Benefit Trust Agreement, dated as of January 25, 2007,                to the                Charming Shoppes, Inc. Supplemental Retirement                Plan.                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.30 | 2003                Incentive Compensation Plan, incorporated by reference to Appendix                C of                the Registrant’s Proxy Statement Pursuant to Section 14 of the Securities                Exchange Act of 1934, filed on May 22, 2003 (File No.                000-07258).                                                                                |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.31 | Charming                Shoppes Variable Deferred Compensation Plan For Executives, Amended                and                Restated Effective January 1, 2005, incorporated by reference to                Form 8-K                of the Registrant dated December 13, 2005, filed December 16, 2005.                (File                No. 000-07258, Exhibit 99.1).              |
|    |                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.2.32 | Amendment                2007-1, Charming Shoppes, Inc.                Supplemental Benefit Trust Agreement, dated as of January 25, 2007,                to the                Charming Shoppes Variable Deferred Compensation Plan for Executives                and                the Charming Shoppes Non-Employee Director Compensation                Plan.                       |

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**Table          of Contents**

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2.33 | Form                of Bonus Agreement by and between Charming Shoppes, Inc. and the                Executive                Officer named in the Agreement, incorporated by reference to Form                10-Q of                the Registrant for the quarter ended October 30, 2004 (File No. 000-07258,                Exhibit 10.14).                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.34 | Charming                Shoppes, Inc. Annual Incentive Program As Amended and Restated January                19,                2005, incorporated by reference to Form 8-K of the Registrant dated                January 19, 2005, filed January 25, 2005. (File No. 000-07258, Exhibit                99.1).                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.35 | Charming                Shoppes, Inc. Annual Incentive Program As Amended and Restated February                2,                2006, incorporated by reference to Form 8-K of the Registrant dated                February 2, 2006, filed February 8, 2006. (File No. 000-07258, Exhibit                99.1).                                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.36 | Charming                Shoppes, Inc. Annual Incentive Program                As Amended and Restated January 24, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.37 | Employment                Agreement, dated as of January 1, 2005, by and between Charming Shoppes,                Inc. and Dorrit J. Bern, incorporated by reference to Form 8-K of                the                Registrant dated January 3, 2005, filed on January 4, 2005. (File                No.                000-07258, Exhibit 99.1)                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.38 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Restricted                Stock Agreement, dated as of May 13, 2004, between Charming Shoppes,                Inc.                and Dorrit J. Bern, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended July 31, 2004 (File No. 000-07258,                Exhibit 10.8).                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.39 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted Stock                Agreement, dated as of January 3, 2005, between Charming Shoppes,                Inc. and                Dorrit J. Bern, incorporated by reference to Form 10-K of the Registrant                for the fiscal year ended January 29, 2005. (File No. 000-07258,                Exhibit                10.2.37).                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.40 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                7,                2005, filed on February 11, 2005. (File No. 000-07258, Exhibit                99.1)                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.41 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                7,                2005, filed on February 11, 2005. (File No. 000-07258, Exhibit                99.3)                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.42 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Units Agreement between Charming Shoppes, Inc. and Dorrit J.                Bern,                incorporated by reference to Form 8-K of the Registrant dated February                2,                2006, filed on February 8, 2006. (File No. 000-07258, Exhibit                99.2)                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.43 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                2,                2006, filed on February 8, 2006. (File No. 000-07258, Exhibit                99.3)                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.44 | Forms                of Executive Severance Agreements by and between Charming Shoppes,                Inc.,                the named executive officers in the company’s Proxy Statement for the                Annual Meeting held on June 15, 2000, and certain other executive                officers                and officers of Charming Shoppes, Inc. and its subsidiaries, incorporated                by reference to Form 10-K of the Registrant for the fiscal year ended                January 29, 2000. (File No. 000-07258, Exhibit                10.2.33). |

----

**Table          of Contents**

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2.45 | Forms                of First Amendment, dated as of February 6, 2003, to Forms of Executive                Severance Agreements, dated July 15, 1999, by and between Charming                Shoppes, Inc., and the executive officers and officers named in the                Agreements, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended February 1, 2003. (File No. 000-07258, Exhibit                10.2.30).              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2.46 | Form                of Second Amendment to Form of Executive Severance Agreement, dated                July                15, 1999, as amended by First Amendment, dated as of February 6,                2003, by                and between Charming Shoppes, Inc. and the executive officers and                officers                named in the agreements.                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2.47 | Form                of Executive Severance Agreement, dated February 6, 2003, by and                between                Charming Shoppes, Inc. and certain executive officers and officers                of                Charming Shoppes, Inc. and its subsidiaries, incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 1,                2003.                (File No. 000-07258, Exhibit                10.2.31). |

**Other      Exhibits**

| 14     | Charming                Shoppes, Inc. Business Ethics and Standards                of Conduct Policy.                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                 |
| 21     | Subsidiaries                of Registrant.                                                                                                                           |
|   |                                                                                                                                                                 |
| 23     | Consent                of independent registered public accounting                firm.                                                                              |
|   |                                                                                                                                                                 |
| 31.1   | Certification                by Principal Executive Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                 |
|   |                                                                                                                                                                 |
| 31.2   | Certification                by Principal Financial Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                 |
|   |                                                                                                                                                                 |
| 32     | Certification                Pursuant to 18 U.S.C. Section 1350, as                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |

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**Table          of Contents**

**SIGNATURES**

|                               | **CHARMING                SHOPPES, INC.**            |
|------------------------------------|------------------------------------------------------|
|                               | (Registrant)                                         |
|                               |                                                 |
|                               |                                                 |
| Date:                April 2, 2007 | **/S/                DORRIT J. BERN**                |
|                               | Dorrit                J. Bern                        |
|                               | Chairman                of the Board                 |
|                               | President                and Chief Executive Officer |

|                                                 |                                        |
|------------------------------------------------------|---------------------------------------------|
| **/S/                DORRIT J. BERN**                | **/S/                ERIC M. SPECTER**      |
| Dorrit                J. Bern                        | Eric                M. Specter              |
| Chairman                of the Board                 | Executive                Vice President     |
| President                and Chief Executive Officer | Chief                Financial Officer      |
| April                2, 2007                         | April                2, 2007                |
|                                                 |                                        |
|                                                 |                                        |
| **/S/                JOHN J. SULLIVAN**              | **/S/                WILLIAM O. ALBERTINI** |
| John                J. Sullivan                      | William                O. Albertini         |
| Vice                President, Corporate Controller  | Director                                    |
| Chief                Accounting Officer              | April                2, 2007                |
| April                2, 2007                         |                                        |
|                                                 |                                        |
|                                                 |                                        |
| **/S/                YVONNE M. CURL**                | **/S/                CHARLES T. HOPKINS**   |
| Yvonne                M. Curl                        | Charles                T. Hopkins           |
| Director                                             | Director                                    |
| April                2, 2007                         | April                2, 2007                |
|                                                 |                                        |
|                                                 |                                        |
| **/S/                KATHERINE M. HUDSON**           | **/S/                PAMELA LEWIS DAVIES**  |
| Katherine                M. Hudson                   | Pamela                Lewis Davies          |
| Director                                             | Director                                    |
| April                2, 2007                         | April                2, 2007                |
|                                                 |                                        |
|                                                 |                                        |
| **/S/                JEANNINE STRANDJORD**           | **/S/                ALAN ROSSKAMM**        |
| Jeannine                Strandjord                   | Alan                Rosskamm                |
| Director                                             | Director                                    |
| April                2, 2007                         | April                2, 2007                |

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**Table          of Contents**

**Exhibit      Index**

| 2.1    | Covenant                Agreement, dated as of August 16, 2001, between Charming Shoppes,                Inc. and                Limited Brands, Inc., incorporated by reference to Form 8-K of the                Registrant dated August 16, 2001, filed on August 31, 2001. (Exhibit                2.3).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 2.2    | Master                Sublease, dated as of August 16, 2001, between Limited Brands, Inc.                and                Lane Bryant, Inc., incorporated by reference to Form 8-K of the Registrant                dated August 16, 2001, filed on August 31, 2001. (Exhibit                2.4).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 2.3    | Stock                Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition                Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown                Traders, Inc. whose names are set forth on the signature pages thereto                and                J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,                incorporated by reference to Form 8-K of the Registrant dated June                2,                2005, filed on June 8, 2005. (File No. 000-07258, Exhibit                2.1).                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.1    | Restated                Articles of Incorporation, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 29, 1994. (File No.                000-07258, Exhibit 3.1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.2    | By-Laws,                as Amended and Restated, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 3.2).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.1    | Amended                and Restated Rights Agreement, dated as of February 1, 2001, between                Charming Shoppes, Inc. and American Stock Transfer & Trust Company, as                Rights Agent, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended February 3, 2001. (File No. 000-07258, Exhibit                4.1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.2    | Registration                Agreement, dated as of August 16, 2001, between Charming Shoppes,                Inc. and                Limited Brands, Inc., incorporated by reference to Form 8-K of the                Registrant dated August 16, 2001, filed on August 31, 2001. (File                No.                000-07258, Exhibit 4.1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.3    | Indenture,                dated as of May 28, 2002, between Charming Shoppes, Inc. and Wachovia                Bank, National Association, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended May 4, 2002. (File No. 000-07258,                Exhibit                4.1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.4    | Registration                Rights Agreement, dated as of May 28, 2002, by and among Charming                Shoppes,                Inc., as Issuer, and J. P. Morgan Securities, Inc., Bear Stearns&                Co., Inc., First Union Securities, Inc., Lazard Freres & Co., LLC, and                McDonald Investments, Inc., as Initial Purchasers, incorporated by                reference to Form 10-Q of the Registrant for the quarter ended May                4,                2002. (File No. 000-07258, Exhibit 4.2).                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.5    | Second                Amended and Restated Loan and Security Agreement, dated July 28,                2005, by                and among Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc.,                CSI                Industries, Inc., FB Apparel, Inc., Catherines Stores Corporation,                Lane                Bryant, Inc., and Crosstown Traders, Inc. as borrowers; a syndicate                of                banks and other financial institutions as lenders, including Wachovia                Bank, National Association as agent for the lenders; and certain                of the                Company’s subsidiaries as guarantors, incorporated by reference to Form                8-K of the Registrant dated July 28, 2005, filed on August 3, 2005.                (File                No. 000-07258, Exhibit 10.1). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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**Table          of Contents**

| 4.6    | Amendment                No. 1, dated as of May 17, 2006, to Second Amended and Restated Loan                and                Security Agreement, dated July 28, 2005, by and among Charming Shoppes,                Inc., Charming Shoppes of Delaware, Inc., CSI Industries, Inc., FB                Apparel, Inc., Catherines Stores Corporation, Lane Bryant, Inc.,                and                Crosstown Traders, Inc. as borrowers; a syndicate of banks and other                financial institutions as lenders, including Wachovia Bank, National                Association as agent for the lenders; and certain of the Company’s                subsidiaries as guarantors, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 29, 2006. (File No. 000-07258,                Exhibit 99.1). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.1 | Second                Amended and Restated Pooling and Servicing Agreement, dated as of                November                25, 1997, as amended on July 22, 1999, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and First                Union                National Bank as Trustee, incorporated by reference to Form 8-K of                Charming Shoppes Master Trust and Charming Shoppes Receivables Corp.,                (File No. 333-71757) dated July 22, 1999. (Exhibit No.                4.1).                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.2 | Fourth                Amendment, dated as of August 5, 2004, to Second Amended and Restated                Pooling and Servicing Agreement, dated as of November 25, 1997, as                amended                on July 22, 1999 and on May 8, 2001, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and Wachovia                Bank,                National Association (formerly known as First Union National Bank)                as                Trustee, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended July 31, 2004 (File No. 000-07258, Exhibit                10.4).                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.3 | Amendment,                dated as of March 18, 2005, to Second Amended and Restated Pooling                and                Servicing Agreement, dated as of November 25, 1997, as amended on                July 22,                1999, May 8, 2001, and August 5, 2004, among Charming Shoppes Receivables                Corp., as Seller, Spirit of America, Inc., as Servicer, and Wachovia                Bank,                National Association, as Trustee, incorporated by reference to Form                10-K                of the Registrant for the fiscal year ended January 29, 2005. (File                No.                000-07258, Exhibit 10.1.3).                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.4 | Series                1999-1 Supplement, dated as of July 22, 1999, to Second Amended and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999, among Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and First Union National                Bank, as Trustee, for $150,000,000 Charming Shoppes Master Trust                Asset-Backed Certificates Series 1999-1, incorporated by reference                to Form                8-K of Charming Shoppes Master Trust and Charming Shoppes Receivables                Corp., (File No. 333-71757) dated July 22, 1999. (Exhibit No.                4.2).                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.5 | Receivables                Purchase Agreement, dated as of May 28, 1999, among Charming Shoppes                Seller, Inc. as Seller, Spirit of America, Inc., as Servicer, Clipper                Receivables Corporation, as Purchaser, State Street Capital Corporation,                as Administrator, and State Street Bank & Trust Company, as                Relationship Bank, incorporated by reference to Form 10-K of the                Registrant for the fiscal year ended February 2, 2002. (File No.                000-07258, Exhibit 10.1.4).                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1.6 | Series                1999-2 Supplement, dated as of May 28, 1999, to Second Amended and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999, among Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and First Union National                Bank, as Trustee, for $55,750,000 Charming Shoppes Master Trust                Asset-Backed Certificates Series 1999-2, incorporated by reference                to Form                10-K of the Registrant for the fiscal year ended January 29, 2000.                (File                No. 000-07258, Exhibit 10.1.23).                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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**Table          of Contents**

| 10.1.7  | Series                2000-VFC Supplement, dated as of November 9, 2000, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997,                among Charming Shoppes Receivables Corp., as Seller, Spirit of America,                Inc., as Servicer, and First Union National Bank, as Trustee, on                behalf of                the Series 2000-VFC Certificateholders, for up to $60,122,700 Charming                Shoppes Master Trust Series 2000-VFC, incorporated by reference to                Form                10-K of the Registrant for the fiscal year ended February 3, 2001.                (File                No. 000-07258, Exhibit 10.1.16).                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.8  | Certificate                Purchase Agreement, dated as of November 9, 2000, among Charming                Shoppes                Receivables Corp. as Seller and as the Class B Purchaser, Spirit                of                America, Inc. as Servicer, Monte Rosa Capital Corporation as the                Conduit                Purchaser, and ING Baring (U.S.) Capital Markets LLC as Administrator                for                the Conduit Purchaser, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended February 3, 2001. (File No.                000-07258, Exhibit 10.1.17).                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.9  | Purchase                Agreement dated as of March 14, 2005 between Citibank USA, N.A.,                Spirit of                America National Bank and Catherines, Inc., incorporated by reference                to                Form 8-K of the Registrant dated March 18, 2005, filed on March 22,                2005.                (File No. 000-07258, Exhibit 99).                                                                                                                                                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.10 | Credit                Card Processing Agreement, among World Financial Network National                Bank,                Lane Bryant, Inc., and Sierra Nevada Factoring, Inc., dated as of                January                31, 1996, incorporated by reference to Form 10-K of the Registrant                for the                fiscal year ended February 2, 2002. (File No. 000-07258, Exhibit                10.1.9).                                                                                                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.11 | Amendment                to Credit Card Processing Agreement, among World Financial Network                National Bank, Lane Bryant, Inc., and Sierra Nevada Factoring, Inc.,                dated                as of January 28, 2005, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended January 29, 2005. (File No.                000-07258, Exhibit 10.1.12).                                                                                                                                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.12 | Purchase                and Sale Agreement, among Spirit of America National Bank, as Seller,                and                Charming Shoppes Receivables Corp., as Purchaser, dated as of November                25,                1997, incorporated by reference to Form S-1/A of Charming Shoppes                Receivables Corp. (File No. 333-71757, Exhibit 10.1(a)).                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.13 | First                Amendment to Purchase and Sale Agreement, among Spirit of America                National                Bank, as Seller, and Charming Shoppes Receivables Corp., as Purchaser,                dated as of July 22, 1999, incorporated by reference to Form 8-K                of                Charming Shoppes Receivables Corp. (File No. 333-71757, Exhibit                10.1).                                                                                                                                                                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.14 | Series                2002-1 Supplement, dated as of November 20, 2002, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997, as                amended on July 22, 1999 and on May 8, 2001, among Charming Shoppes                Receivables Corp., as Seller, Spirit of America, Inc., as Servicer,                and                Wachovia Bank, National Association, as Trustee, for $100,000,000                Charming                Shoppes Master Trust Asset-Backed Certificates Series 2002-1, incorporated                by reference to Form 10-Q of the Registrant for the quarter ended                November                2, 2002. (File No. 000-07258, Exhibit 10.1). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.1.15 | Charming                Shoppes Master Trust $63,500,000 Fixed Rate Class A Asset Backed                Certificates, Series 2002-1 and $16,500,000 Fixed Rate Class B Asset                Backed Certificates, Series 2002-1 Certificate Purchase Agreement,                dated                as of November 22, 2002, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.2).                                                                                                                                                                                                                                                                         |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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**Table          of Contents**

| 10.1.16 | Certificate                Purchase Agreement, dated as of November 22, 2002, among Wachovia                Bank,                National Association, as Trustee, Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and The Class C Holders                described therein, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.3).                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.17 | Certificate                Purchase Agreement, dated as of November 22, 2002, among Wachovia                Bank,                National Association, as Trustee, Charming Shoppes Receivables Corp.,                as                Seller, Spirit of America, Inc., as Servicer, and The Class D Holders                described therein, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended November 2, 2002. (File No. 000-07258,                Exhibit 10.4).                                                                                                                                                                                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.18 | $14,000,000                Promissory Note, dated October 2002, between White Marsh Distribution,                LLC., as Borrower, and General Electric Capital Business Asset Funding                Corporation, as Payee and Holder, incorporated by reference to Form                10-Q                of the Registrant for the quarter ended November 2, 2002. (File No.                000-07258, Exhibit 10.5).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.19 | Commercial                Deed of Trust, Security Agreement, Assignment of Leases and Rents,                and                Fixture Filing, made as of October 2002, among the Grantor, White                Marsh                Distribution, LLC, as Borrower, in favor of James M. Smith, as Trustee,                for the benefit of the Beneficiary, General Electric Capital Business                Asset Funding Corporation, as Lender, incorporated by reference to                Form                10-Q of the Registrant for the quarter ended November 2, 2002. (File                No.                000-07258, Exhibit 10.6).                                                                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.20 | Certificate                Purchase Agreement, dated as of January 21, 2004, among Charming                Shoppes                Receivables Corp., as Seller and as the Class B Purchaser, Spirit                of                America, Inc., as Servicer, Sheffield Receivables Corporation, as                the                Conduit Purchaser, and Barclay’s Bank PLC as Administrator for the Conduit                Purchaser, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended January 31, 2004. (File No. 000-07258, Exhibit                10.1.17).                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.21 | Series                2004-VFC Supplement, dated as of January 21, 2004, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997 and                amended as of July 22, 1999 and as of May 8, 2001, among Charming                Shoppes                Receivables Corp., as Seller, Spirit of America, Inc., as Servicer,                and                Wachovia Bank, National Association, as Trustee on behalf of the                Series                2004-VFC Certificateholders, for up to $132,000,000 Charming Shoppes                Master Trust Asset-Backed Certificates Series 2004-VFC, incorporated                by                reference to Form 10-K of the Registrant for the fiscal year ended                January                31, 2004. (File No. 000-07258, Exhibit 10.1.18). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.22 | Series                2004-1 Supplement, dated as of August 5, 2004, to Second Amended                and                Restated Pooling and Service Agreement, dated as of November 25,                1997 (as                amended on July 22, 1999, on May 8, 2001 and on August 5, 2004),                among                Charming Shoppes Receivables Corp., as Seller, Spirit of America,                Inc., as                Servicer, and Wachovia Bank, National Association, as Trustee, on                behalf                of the Series 2004-1 Certificateholders, for $180,000,000 Charming                Shoppes                Master Trust Series 2004-1, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 31, 2004 (File No. 000-07258,                Exhibit 10.5).                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1.23 | Certificate                Purchase Agreement, dated as of July 21, 2004, among Charming Shoppes                Receivables Corp., Fashion Service Corp., Spirit of America, Inc.,                and                Barclay’s Capital Inc. (as representative of the Initial Purchasers),                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended July 31, 2004 (File No. 000-07258, Exhibit 10.6).                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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**Table          of Contents**

| 10.1.24 | Certificate                Purchase Agreement, dated as of August 5, 2004, among Wachovia Bank,                National Association as Trustee, Charming Shoppes Receivables Corp.                as                Seller, Spirit of America, Inc. as Servicer, and Clipper Receivables                Company LLC as Initial Class C Holder, incorporated by reference                to Form                10-Q of the Registrant for the quarter ended July 31, 2004 (File                No.                000-07258, Exhibit 10.7).                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| 10.1.25 | Mortgage,                Assignment of Leases and Rents and Security Agreement, dated as of                October                6, 2004, between FB Distro Distribution Center, LLC, as Mortgagor,                and                BankAtlantic Commercial Mortgage Capital, LLC, as Mortgagee, incorporated                by reference to Form 10-Q of the Registrant for the quarter ended                October                30, 2004 (File No. 000-07258, Exhibit 10.9).                                                                                                                                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.26 | $13,000,000                Mortgage Note, dated October 6, 2004, between FB Distro Distribution                Center, LLC, as Maker, and BankAtlantic Commercial Mortgage Capital,                LLC,                as Payee, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended October 30, 2004 (File No. 000-07258, Exhibit                10.10).                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.27 | Guaranty,                executed as of October 6, 2004, by Charming Shoppes, Inc., as Guarantor,                for the benefit of BankAtlantic Commercial Mortgage Capital, LLC,                as                Lender, incorporated by reference to Form 10-Q of the Registrant                for the                quarter ended October 30, 2004 (File No. 000-07258, Exhibit                10.11).                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.28 | Hazardous                Substances Indemnity Agreement, dated October 6, 2004, by FB Distro                Distribution Center, LLC and by Charming Shoppes, Inc., jointly and                severally as Indemnitors, in favor of BankAtlantic Commercial Mortgage                Capital, LLC, as Holder, incorporated by reference to Form 10-Q of                the                Registrant for the quarter ended October 30, 2004 (File No. 000-07258,                Exhibit 10.12).                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.29 | Amended                and Restated Class D Certificate Purchase Agreement, dated as of                August                25, 2004, among Wachovia Bank, National Association as Trustee, Charming                Shoppes Receivables Corp. as Seller and as Initial Class D-1 Holder,                Spirit of America, Inc. as Servicer, and Clipper Receivables Company                LLC,                as the Class D-1 Holder, incorporated by reference to Form 8-K of                the                Registrant dated August 24, 2004, filed on August 27, 2004. (File                No.                000-07258, Exhibit 99.1).            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.30 | Amended                and Restated Certificate Purchase Agreement, dated as of November                22, 2004                and Amended and Restated as of November 18, 2004, among Wachovia                Bank,                National Association as Trustee, Charming Shoppes Receivables Corp.                as                Seller, Spirit of America, Inc. as Servicer, and the Class D-2                Certificateholders Described Herein, incorporated by reference to                Form                10-Q of the Registrant for the quarter ended October 30, 2004 (File                No.                000-07258, Exhibit 10.13). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1.31 | Amended                and Restated Receivables Purchase Agreement, dated as of June 2,                2005,                among Catalog Receivables LLC as Seller, Spirit of America, Inc.                as                Servicer, Sheffield Receivables Corporation as Purchaser, and Barclays                Bank PLC as Administrator, incorporated by reference to Form 10-K                of the                Registrant for the fiscal year ended January 28, 2006 (File No. 000-07258,                Exhibit 10.1.31).                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.2.1  | The                1988 Key Employee Stock Option Plan of Charming Shoppes, Inc., as                amended                and restated January 25, 2006, incorporated by reference to Form                10-K of                the Registrant for the fiscal year ended January 28, 2006 (File No.                000-07258, Exhibit 10.2.1).                                                                                                                                                                                                                                                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.2.2  | Form                of Charming Shoppes, Inc. 1988 Key Employee Stock Option Plan Key                Employee                Stock Option Agreement, incorporated by reference to Form 10-K of                the                Registrant for the fiscal year ended January 28, 2006 (File No. 000-07258,                Exhibit 10.2.2).                                                                                                                                                                                                                                                                                                                   |
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**Table          of Contents**

| 10.2.3  | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program,                As                Amended and Restated, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 10.1).                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.4  | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program,                As                Amended and Restated at June 27, 2002, incorporated by reference                to Form                10-K of the Registrant for the fiscal year ended February 1, 2003.                (File                No. 000-07258, Exhibit 10.2.6). |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.5  | The                Charming Shoppes, Inc. 2003 Non-Employee                Directors Compensation Plan, Amended and Restated Effective January                1,                2005.                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.6  | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program                Stock                Option Agreement, incorporated by reference to Form 10-Q of the Registrant                for the quarter ended July 31, 1999. (File No. 000-07258, Exhibit                10.2).                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.7  | The                Charming Shoppes, Inc. Non-Employee Directors Compensation Program                Restricted Stock Agreement, incorporated by reference to Form 10-Q                of the                Registrant for the quarter ended July 31, 1999. (File No. 000-07258,                Exhibit 10.3).                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.8  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Stock Option Agreement, incorporated by reference to Form 8-K of                the                Registrant dated June 23, 2005, filed on June 29, 2005. (File No.                000-07258, Exhibit 10.1).                               |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.9  | Form                of Charming Shoppes, Inc. 2003 Non-Employee Directors Compensation                Plan                Restricted Share Units Agreement, incorporated by reference to Form                8-K of                the Registrant dated June 23, 2005, filed on June 29, 2005. (File                No.                000-07258, Exhibit 10.2).      |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.10 | The                1993 Employees’ Stock Incentive Plan of Charming Shoppes, Inc.,                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended January 29, 1994. (File No. 000-07258, Exhibit                10.2.10).                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.11 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Restricted                Stock Agreement, dated as of February 11, 2002, incorporated by reference                to Form 10-K of the Registrant for the fiscal year ended February                2, 2002.                (File No. 000-07258, Exhibit 10.2.8).                |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.12 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Stock Option                Agreement (regular vesting schedule), incorporated by reference to                Form                10-K of the Registrant for the fiscal year ended February 2, 2002.                (File                No. 000-07258, Exhibit 10.2.20).        |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.13 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Stock Option                Agreement (accelerated vesting schedule), incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 2,                2002.                (File No. 000-07258, Exhibit 10.2.21).    |
|    |                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.14 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan                Performance-Accelerated Stock Option Agreement, incorporated by reference                to Form 10-K of the Registrant for the fiscal year ended February                2, 2002.                (File No. 000-07258, Exhibit 10.2.22).                          |
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**Table          of Contents**

| 10.2.15 | The                Charming Shoppes, Inc. Employee Stock Purchase Plan, as amended,                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 3, 1996. (File No. 000-07258, Exhibit                10.2.10).                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| 10.2.16 | The                Charming Shoppes Inc. 1999 Associates’ Stock Incentive Plan, incorporated                by reference to Form 10-K of the Registrant for the fiscal year ended                January 30, 1999. (File No. 000-07258, Exhibit                10.2.24).                                                                                                                       |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.17 | Charming                Shoppes, Inc. 1999 Associates’ Stock Incentive Plan Stock Option                Agreement, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended January 30, 1999. (File No. 000-07258, Exhibit                10.2.25).                                                                                    |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.18 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan, incorporated by reference to Form 10-K of the Registrant                for the fiscal year ended February 3, 2001. (File No. 000-07258,                Exhibit                10.2.29).                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.19 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Stock Option Agreement (regular vesting schedule)                ,                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 2, 2002. (File No. 000-07258, Exhibit                10.2.23). |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.20 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Stock Option Agreement (accelerated vesting schedule),                incorporated by reference to Form 10-K of the Registrant for the                fiscal                year ended February 2, 2002. (File No. 000-07258, Exhibit                10.2.24).             |
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| 10.2.21 | The                Charming Shoppes, Inc. Amended and Restated 2000 Associates’ Stock                Incentive Plan Restricted Stock Agreement, incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 2,                2002.                (File No. 000-07258, Exhibit 10.2.25).                                        |
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| 10.2.22 | 2004                Stock Award and Incentive Plan, incorporated by reference to Appendix                B of                the Registrant’s Proxy Statement Pursuant to Section 14 of the Securities                Exchange Act of 1934, filed on May 19, 2004.                                                                                                                             |
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| 10.2.23 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Stock Option Agreement,                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended October 30, 2004 (File No. 000-07258, Exhibit                10.15).                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.24 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Agreement - Section 16 Officers, incorporated by reference                to Form                8-K of the Registrant dated February 7, 2005, filed on February 11,                2005.                (File No. 000-07258, Exhibit 99.2)                                        |
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| 10.2.25 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement, incorporated by reference to Form 8-K of the Registrant                dated February 7, 2005, filed on February 11, 2005. (File No. 000-07258,                Exhibit 99.4)                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2.26 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Units Agreement, incorporated by reference to Form 8-K of the                Registrant dated March 15, 2006, filed on March 20, 2006. (File No.                000-07258, Exhibit 99.1)                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                 |

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**Table          of Contents**

| 10.2.27 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted Stock                Agreement - Associates Other Than Section 16 Officers, incorporated                by                reference to Form 10-Q of the Registrant for the quarter ended October                30,                2004 (File No. 000-07258, Exhibit 10.17).                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| 10.2.28 | Charming                Shoppes, Inc. Supplemental Retirement Plan, effective February 1,                2003,                incorporated by reference to Form 10-Q of the Registrant for the                quarter                ended May 3, 2003. (File No. 000-07258, Exhibit 10.1).                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.29 | Amendment                2007-1, Charming Shoppes, Inc.                Supplemental Benefit Trust Agreement, dated as of January 25, 2007,                to the                Charming Shoppes, Inc. Supplemental Retirement                Plan.                                                                                                                                                                         |
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| 10.2.30 | 2003                Incentive Compensation Plan, incorporated by reference to Appendix                C of                the Registrant’s Proxy Statement Pursuant to Section 14 of the Securities                Exchange Act of 1934, filed on May 22, 2003 (File No.                000-07258).                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.31 | Charming                Shoppes Variable Deferred Compensation Plan For Executives, Amended                and                Restated Effective January 1, 2005, incorporated by reference to                Form 8-K                of the Registrant dated December 13, 2005, filed December 16, 2005.                (File                No. 000-07258, Exhibit 99.1).                                                 |
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| 10.2.32 | Amendment                2007-1, Charming Shoppes, Inc.                Supplemental Benefit Trust Agreement, dated as of January 25, 2007,                to the                Charming Shoppes Variable Deferred Compensation Plan for Executives                and                the Charming Shoppes Non-Employee Director Compensation                Plan.                                                          |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.33 | Form                of Bonus Agreement by and between Charming Shoppes, Inc. and the                Executive                Officer named in the Agreement, incorporated by reference to Form                10-Q of                the Registrant for the quarter ended October 30, 2004 (File No. 000-07258,                Exhibit 10.14).                                                                              |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.34 | Charming                Shoppes, Inc. Annual Incentive Program As Amended and Restated January                19,                2005, incorporated by reference to Form 8-K of the Registrant dated                January 19, 2005, filed January 25, 2005. (File No. 000-07258, Exhibit                99.1).                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.35 | Charming                Shoppes, Inc. Annual Incentive Program As Amended and Restated February                2,                2006, incorporated by reference to Form 8-K of the Registrant dated                February 2, 2006, filed February 8, 2006. (File No. 000-07258, Exhibit                99.1).                                                                                                            |
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| 10.2.36 | Charming                Shoppes, Inc. Annual Incentive Program                As Amended and Restated January 24, 2007.                                                                                                                                                                                                                                                                                                     |
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| 10.2.37 | Employment                Agreement, dated as of January 1, 2005, by and between Charming Shoppes,                Inc. and Dorrit J. Bern, incorporated by reference to Form 8-K of                the                Registrant dated January 3, 2005, filed on January 4, 2005. (File                No.                000-07258, Exhibit 99.1)                                                                          |
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| 10.2.38 | The                Charming Shoppes, Inc. 1993 Employees’ Stock Incentive Plan Restricted                Stock Agreement, dated as of May 13, 2004, between Charming Shoppes,                Inc.                and Dorrit J. Bern, incorporated by reference to Form 10-Q of the                Registrant for the quarter ended July 31, 2004 (File No. 000-07258,                Exhibit 10.8).                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.2.39 | Charming                Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted Stock                Agreement, dated as of January 3, 2005, between Charming Shoppes,                Inc. and                Dorrit J. Bern, incorporated by reference to Form 10-K of the Registrant                for the fiscal year ended January 29, 2005. (File No. 000-07258,                Exhibit                10.2.37). |

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**Table          of Contents**

| 10.2.40 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                7,                2005, filed on February 11, 2005. (File No. 000-07258, Exhibit                99.1)                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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| 10.2.41 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                7,                2005, filed on February 11, 2005. (File No. 000-07258, Exhibit                99.3)                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.42 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Restricted                Stock Units Agreement between Charming Shoppes, Inc. and Dorrit J.                Bern,                incorporated by reference to Form 8-K of the Registrant dated February                2,                2006, filed on February 8, 2006. (File No. 000-07258, Exhibit                99.2)                                                                                                                                                                         |
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| 10.2.43 | Form                of Charming Shoppes, Inc. 2004 Stock Award and Incentive Plan Performance                Share Agreement between Charming Shoppes, Inc. and Dorrit J. Bern,                incorporated by reference to Form 8-K of the Registrant dated February                2,                2006, filed on February 8, 2006. (File No. 000-07258, Exhibit                99.3)                                                                                                                                                                                             |
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| 10.2.44 | Forms                of Executive Severance Agreements by and between Charming Shoppes,                Inc.,                the named executive officers in the company’s Proxy Statement for the                Annual Meeting held on June 15, 2000, and certain other executive                officers                and officers of Charming Shoppes, Inc. and its subsidiaries, incorporated                by reference to Form 10-K of the Registrant for the fiscal year ended                January 29, 2000. (File No. 000-07258, Exhibit                10.2.33). |
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| 10.2.45 | Forms                of First Amendment, dated as of February 6, 2003, to Forms of Executive                Severance Agreements, dated July 15, 1999, by and between Charming                Shoppes, Inc., and the executive officers and officers named in the                Agreements, incorporated by reference to Form 10-K of the Registrant                for                the fiscal year ended February 1, 2003. (File No. 000-07258, Exhibit                10.2.30).                                                                                                 |
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| 10.2.46 | Form                of Second Amendment to Form of Executive Severance Agreement, dated                July                15, 1999, as amended by First Amendment, dated as of February 6,                2003, by                and between Charming Shoppes, Inc. and the executive officers and                officers                named in the agreements.                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2.47 | Form                of Executive Severance Agreement, dated February 6, 2003, by and                between                Charming Shoppes, Inc. and certain executive officers and officers                of                Charming Shoppes, Inc. and its subsidiaries, incorporated by reference                to                Form 10-K of the Registrant for the fiscal year ended February 1,                2003.                (File No. 000-07258, Exhibit 10.2.31).                                                                                                   |
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| 14      | Charming                Shoppes, Inc. Business Ethics and Standards                of Conduct Policy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| 21      | Subsidiaries                of Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| 23      | Consent                of independent registered public accounting                firm.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| 31.1    | Certification                by Principal Executive Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| 31.2    | Certification                by Principal Financial Officer                Pursuant to Section 302 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| 32      | Certification                Pursuant to 18 U.S.C. Section 1350, as                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002.                                                                                                                                                                                                                                                                                                                                                                                                                  |

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**Table          of Contents**