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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For The Fiscal Year Ended January 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-10767
 RETAIL VENTURES, INC.
  Ohio
    
    20-0090238(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)4150 E. Fifth Avenue, Columbus, Ohio
    
    43219(Address of principal executive offices)
    
    (Zip Code)
   Title of each class:
    
    Name of each exchange on which registered:Common Shares, without par value
    
    New York Stock Exchange
  o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 Item No.
    
    PagePART I1. Business
    
    
    51.A Risk Factors
    
    
    141.B Unresolved Staff Comments
    
    
    282. Properties
    
    
    293. Legal Proceedings
    
    
    304. Submission of Matters to a Vote of Security Holders
    
    
    30PART II5. Market for the Registrants Common Equity, Related Shareholder Matters and
Issuer Purchases of Equity Securities
    
    
    316. Selected Financial Data
    
    
    337. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    347A. Quantitative and Qualitative Disclosures about Market Risk
    
    
    498. Financial Statements and Supplementary Data
    
    
    519. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    519A. Controls and Procedures
    
    
    519B. Other Information
    
    
    51PART III10. Directors, Executive Officers and Corporate Governance
    
    
    5211. Executive Compensation
    
    
    5212. Security Ownership of Certain Beneficial Owners and Management and
Related Shareholders Matters
    
    
    5213. Certain Relationships and Related Transactions, and Director Independence
    
    
    5314. Principal Accountant Fees and Services
    
    
    53PART IV15. Exhibits, Financial Statement Schedules
    
    
    54SIGNATURES
    
    
    55EX-10.94EX-10.95EX-10.96EX-10.97EX-10.99EX-12EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2
  2




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TABLE OF CONTENTS TO FINANCIAL STATEMENTSReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets
    
    
    F-3Consolidated Statements of Operations
    
    
    F-5Consolidated Statements of Shareholders Equity
    
    
    F-6Consolidated Statements of Cash Flows
    
    
    F-8Notes
to Consolidated Financial Statements
    
    
    F-9Index to Exhibits
    
    
    E-1
 3




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PART I
   Cautionary Statement Regarding Forward-Looking Information for Purposes of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995
  
    
    DSWs success in opening and operating new stores on a timely and profitable basis;
    
    continuation of DSWs supply agreements and the financial condition of its leased
business partners;
    
    maintaining good relationships with our vendors;
    
    our ability to anticipate and respond to fashion trends;
    
    fluctuation of our comparable store sales and quarterly financial performance;
    
    the effect of the bankruptcy filing made by Value City and any such filing which may be made by Filenes Basement;
    
    the impact of the disposition of Filenes Basement and of a majority interest in
Value City and the reliance on remaining subsidiaries to pay indebtedness and
intercompany service obligations;
    
    the risk of Value City and Filenes Basement not paying us or its other creditors,
for which Retail Ventures may have some liability;
    
    the impact of Value City and Filenes Basement on our liquidity;
    
    disruption of our distribution operations;
    
    our dependence on DSW for key services;
    
    the success of dsw.com;
    
    failure to retain our key executives or attract qualified new personnel;
    
    our competitiveness with respect to style, price, brand availability and customer
service;
    
    declining general economic conditions;
    
    liquidity and investment risks related to our investments; and
    
    DSWs ability to secure additional credit upon the termination of its existing credit
facility.
  4




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ITEM 1. BUSINESS.
 History of Our Business
          5




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Accounting for Impairment or Disposal of Long-Lived Assets
  General
 DSW.
 Filenes Basement.
 Corporate.
  DSW
  6




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Merchandising
 Selection.
   Category
    
    Fiscal 2008
    
    Fiscal 2007
    
    Fiscal 2006Womens
    
    
    66
    %
    
    
    65
    %
    
    
    65
    %Mens
    
    
    15
    %
    
    
    16
    %
    
    
    16
    %Athletic
    
    
    14
    %
    
    
    14
    %
    
    
    14
    %
 Value.
  Convenience.
 7




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Advertising and Promotion
   Demonstrated Ability to Consistently Deliver Growth
   Expansion
  Distribution
  Leased Departments and Supply Agreements
   8




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dsw.com
  Segment Seasonality
  Service Marks, Trademarks and Tradenames
   FILENES BASEMENT
   Merchandising
 Designer and Famous Brand Merchandise.
 9




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Value Pricing.
  Advertising and Promotion
     Stores
 Store Location, Design and Operations.
  10




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Expansion and Store Closures.
  Distribution
  License Agreements and Leased Departments
    11




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Segment Seasonality
  Service Marks, Trademarks and Tradenames
 ,
 MANAGEMENT INFORMATION AND CONTROL SYSTEMS
 Retail Ventures .
  DSW.
 Filenes Basement.
 Associates
   12




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Competition
    Available Information
  13




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ITEM 1A. RISK FACTORS.
  Introductory Note
  Risk Factors Relating to DSW
 DSW plans to open approximately 10 DSW stores in fiscal 2009 and is currently evaluating its
strategy for fiscal 2010 and beyond, which could strain its resources and have a material adverse
effect on its business and financial performance.
  DSW may be unable to open all the DSW stores contemplated by its growth strategy on a timely basis,
and new stores it opens may not be profitable or may have an adverse impact on the profitability of
existing stores, either of which could have a material adverse effect on DSWs business, financial
condition and results of operations.
  
    
    identify suitable markets and sites for new store locations with financially stable
co-tenants and landlords;
    
    negotiate favorable lease terms;
    
    build-out or refurbish sites on a timely and effective basis;
    
    obtain sufficient levels of inventory to meet the needs of new stores;
    
    obtain sufficient financing and capital resources or generate sufficient
operating cash flows from operations to fund growth;
    
    open new stores at costs not significantly greater than those anticipated;
    
    successfully open new DSW stores in markets in which it currently has few or no stores;
    
    control the costs of other capital investments associated with store openings;
    
    hire, train and retain qualified managers and store personnel; and
    
    successfully integrate new stores into our existing infrastructure,
operations, management and distribution systems or adapt such infrastructure,
operations and systems to accommodate DSWs growth.
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DSW has entered into Supply Agreements with Stein Mart, Gordmans and Filenes Basement. If Stein
Mart, Gordmans or Filenes Basement were to terminate their supply agreements, close a significant
number of stores, declare bankruptcy or liquidate, it could have a material adverse effect on DSWs
business and financial performance.
   DSW launched dsw.com in the first half of fiscal 2008, which may not be successful and could
adversely affect DSWs results of operations or distract management from DSWs core business.
  DSW relies on its good relationships with vendors to purchase better-branded merchandise at
favorable prices. If these relationships were to be impaired, DSW may not be able to obtain a
sufficient selection of merchandise at attractive prices, and it may not be able to respond
promptly to changing fashion trends, either of which could have a material adverse effect on DSWs
competitive position, and business and financial performance.
  15




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DSW may be unable to anticipate and respond to fashion trends and consumer preferences in the
markets in which it operates, which could have a material adverse effect on its business, financial
condition and results of operations.
  
    
    variations in local economic conditions, which could affect DSWs customers
discretionary spending and their price sensitivity;
    
    unanticipated fashion trends;
    
    DSWs success in developing and maintaining vendor relationships that provide
DSW access to in-season merchandise at attractive prices;
    
    DSWs success in distributing merchandise to DSW stores in an efficient manner;
and
    
    changes in weather patterns, which in turn affect consumer preferences.
  DSWs operations are affected by seasonal variability.
  DSWs sales and quarterly financial performance may fluctuate for a variety of reasons, which could
result in a decline in the price of the DSW Class A Common Shares.
  
    
    challenging U.S. economic conditions and, in particular, the retail sales
environment.
    
    changes in DSWs merchandising strategy;
    
    timing and concentration of new DSW store openings and related pre-opening and
other start-up costs;
    
    levels of pre-opening expenses associated with new DSW stores;
    
    changes in DSWs merchandise mix;
    
    changes in and regional variations in demographic and population
characteristics;
    
    timing of promotional events;
    
    seasonal fluctuations due to weather conditions; and
    
    actions by DSWs competitors.
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DSW is reliant on its information systems and the loss or disruption of services could affect its
ability to implement its growth strategy and have a material adverse effect on DSWs business.
   The loss or disruption of DSWs distribution and fulfillment centers could have a material adverse
effect on its business and operations.
   DSWs failure to retain its existing senior management team and to continue to attract qualified
new personnel could adversely affect its business.
  DSW may be unable to compete favorably in its highly competitive market.
  17




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The current slowdown in the United States economy has adversely affected consumer confidence and
consumer spending habits.
     DSW relies on foreign sources for its merchandise, and its business is therefore subject to risks
associated with international trade.
  
    
    economic and political instability in countries where these suppliers are
located;
    
    international hostilities or acts of war or terrorism affecting the United
States or foreign countries from which DSWs merchandise is sourced;
    
    increases in shipping costs;
    
    transportation delays and interruptions, including increased inspections of
import shipments by domestic authorities;
    
    work stoppages;
    
    adverse fluctuations in currency exchange rates;
    
    U.S. laws affecting the importation of goods, including duties, tariffs and
quotas and other non-tariff barriers;
    
    expropriation or nationalization;
    
    changes in local government administration and governmental policies;
    
    changes in import duties or quotas;
    
    compliance with trade and foreign tax laws; and
    
    local business practices, including compliance with local laws and with
domestic and international labor standards.
  18




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Restrictions in DSWs secured revolving credit facility could limit its operational flexibility.
  DSW may be unable to secure additional credit upon the termination of its existing credit facility
in July 2010 or the terms of additional credit could be materially different than the terms DSW has
today.
  The liquidity of DSWs investments could fluctuate based on adverse market conditions.
   The bankruptcy of Value City and any future bankruptcy of Filenes Basement
 could adversely impact DSWs operations.
   19




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Risk Factors Relating to Our Discontinued Operations
 Filenes
Basement is currently experiencing material operational and liquidity
difficulties and has
been disposed of by RVI.
    RVI may
be required to satisfy its guarantee of the Filenes Basement Revolving Loan and other
obligations of Filenes Basement, which could adversely affect RVIs liquidity.
  20




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Value City Department Stores filed for bankruptcy protection and closed its remaining stores. Value
City owes us approximately $7.3 million as of January 31, 2009 and we may not be able to collect
this amount from Value City.
   Retail Ventures is subject to various risks associated with the Value City bankruptcy proceedings.
  Certain Other Risk Factors Relating to RVI
 Retail Ventures is a holding company and has generally relied on its subsidiaries to make payments
on its indebtedness and meet its obligations.
  21




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We could have significant liquidity issues at the RVI level which may require us to issue
additional debt or equity or to sell assets, and there can be no assurance that such transactions
can be completed on favorable terms or that such transactions would satisfy all of RVIs liquidity
requirements.
  A sale of equity by RVI to seek to address our significant liquidity issues would dilute existing
shareholders, which dilution could be increased by certain anti-dilution protections under existing
warrants issued by RVI.
   22




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We may be unable to quickly monetize our investment in DSW Common Shares.
   Our ability to use net operating loss carryforwards to reduce future tax payments may be limited if
there is a change in ownership of Retail Ventures.
  We have debt which could have consequences if we were unable to repay the balances or interest due.
  
    
    limit our flexibility in planning for, or reacting to, changes in our industry
in which we operate;
    
    place us at a competitive disadvantage compared to our competitors that have
less debt;
    
    limit our ability to seek and borrow additional funds; and
    
    expose us to risks inherent in interest rate fluctuations because some of our
borrowings are at variable rates of interest, which could result in higher interest
expense in the event of increases in interest rates.
   23




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Our stock price may fluctuate significantly.
  
    
    developments related to DSW and fluctuations in the market price of DSW shares;
    
    continuing issues relating to Value City and Filenes Basement;
    
    transactions entered into to enhance liquidity at Retail Ventures;
    
    quarterly variations in actual or anticipated operating results;
    
    changes by securities analysts in estimates regarding Retail Ventures;
    
    conditions in the retail industry;
    
    the condition of the stock market; and
    
    general economic conditions.
 SSC and/or its affiliates may compete directly against us.
  Retail Ventures continues to be dependent on DSW to provide us with key services for our business.
  24




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We are controlled by SSC and its affiliates, whose interests may differ from our other
shareholders.
  Some of our directors and officers also serve as directors or officers of DSW, or may have
conflicts of interest because they may own DSW Common Shares or options to purchase DSW Common
Shares, or they may receive cash-based or equity-based awards based on the performance of DSW.
  Risk Factors Relating to Our PIES
 PIES holders bear the full risk of a decline in the market price of the DSW Class A Common Shares
between the pricing date for the PIES and the exchange date.
  The opportunity for equity appreciation provided by an investment in the PIES is less than that
provided by a direct investment in DSW Class A Common Shares.
   25




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The market price of the DSW Class A Common Shares, which may fluctuate significantly, may adversely
affect the market price of the PIES.
  
    
    developments related to DSW;
    
    quarterly variations in DSWs actual or anticipated operating results;
    
    changes by securities analysts in estimates regarding DSW;
    
    conditions in the retail industry;
    
    the condition of the stock market;
    
    general economic conditions; and
    
    sales of DSWs Common Shares by its existing shareholders, including Retail
Ventures, or holders of rights to purchase DSW Common Shares.
  The PIES may adversely affect the market price for DSW Class A Common Shares.
  The adjustments to the exchange ratio do not cover all the events that could adversely affect the
market price of the DSW Class A Common Shares.
  PIES holders have no rights with respect to DSW Class A Common Shares, but may be negatively
affected by some changes made with respect to DSW Class A Common Shares.
 26




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Our obligations under the PIES are effectively junior to our other existing and future secured debt
to the extent of the value of the assets securing that debt and effectively subordinate to the debt
and other liabilities of our subsidiaries.
   The tax consequences of an investment in the PIES are uncertain.
   Settling the PIES with DSW Class A Common Shares may result in a material amount of taxable income
to Retail Ventures.
  27




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In the event of our bankruptcy, the principal amount of the PIES would not represent a debt claim
against us.
  DSW has no obligations with respect to the PIES and does not have to consider PIES holders
interests for any reason.
  PIES holders should carefully consider the risk factors relating to DSW.
  In the event that we or certain of our subsidiaries commence any proceeding seeking liquidation,
reorganization or similar relief under any bankruptcy law, we may suffer material adverse effects
on our business as a result of the acceleration of our obligations under the PIES.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
  28




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ITEM 2. PROPERTIES.
  FilenesDSW
    
    Basement
    
    TotalAlabama
    
    
    2
    
    
    
    
    
    
    
    2Arizona
    
    
    6
    
    
    
    
    
    
    
    6California
    
    
    32
    
    
    
    
    
    
    
    32Colorado
    
    
    8
    
    
    
    
    
    
    
    8Connecticut
    
    
    3
    
    
    
    
    
    
    
    3Delaware
    
    
    1
    
    
    
    
    
    
    
    1Florida
    
    
    22
    
    
    
    1
    
    
    
    23Georgia
    
    
    14
    
    
    
    1
    
    
    
    15Illinois
    
    
    15
    
    
    
    4
    
    
    
    19Indiana
    
    
    7
    
    
    
    
    
    
    
    7Iowa
    
    
    1
    
    
    
    
    
    
    
    1Kansas
    
    
    2
    
    
    
    
    
    
    
    2Kentucky
    
    
    2
    
    
    
    
    
    
    
    2Louisiana
    
    
    2
    
    
    
    
    
    
    
    2Maine
    
    
    1
    
    
    
    
    
    
    
    1Maryland
    
    
    9
    
    
    
    5
    
    
    
    14Massachusetts
    
    
    12
    
    
    
    8
    
    
    
    20Michigan
    
    
    14
    
    
    
    
    
    
    
    14Minnesota
    
    
    8
    
    
    
    
    
    
    
    8Missouri
    
    
    4
    
    
    
    
    
    
    
    4Nebraska
    
    
    2
    
    
    
    
    
    
    
    2Nevada
    
    
    3
    
    
    
    
    
    
    
    3New Hampshire
    
    
    1
    
    
    
    
    
    
    
    1New Jersey
    
    
    10
    
    
    
    3
    
    
    
    13New York
    
    
    18
    
    
    
    6
    
    
    
    24North Carolina
    
    
    6
    
    
    
    
    
    
    
    6Ohio
    
    
    14
    
    
    
    2
    
    
    
    16Oklahoma
    
    
    2
    
    
    
    
    
    
    
    2Oregon
    
    
    3
    
    
    
    
    
    
    
    3Pennsylvania
    
    
    15
    
    
    
    2
    
    
    
    17Rhode Island
    
    
    1
    
    
    
    
    
    
    
    1Tennessee
    
    
    4
    
    
    
    
    
    
    
    4Texas
    
    
    30
    
    
    
    
    
    
    
    30Utah
    
    
    3
    
    
    
    
    
    
    
    3Virginia
    
    
    13
    
    
    
    1
    
    
    
    14Washington
    
    
    4
    
    
    
    
    
    
    
    4Washington D.C.
    
    
    
    
    
    
    3
    
    
    
    3Wisconsin
    
    
    4
    
    
    
    
    
    
    
    4298
    
    
    
    36
    
    
    
    334
   29




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ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  30




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PART II
 
 ITEM 5.
    
    MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES.
  High
    
    LowFiscal 2007:First Quarter
    
    $
    23.30
    
    
    $
    19.12Second Quarter
    
    
    21.00
    
    
    
    11.97Third Quarter
    
    
    13.64
    
    
    
    7.87Fourth Quarter
    
    
    8.49
    
    
    
    3.91Fiscal 2008:First Quarter
    
    $
    7.46
    
    
    $
    3.77Second Quarter
    
    
    5.58
    
    
    
    3.29Third Quarter
    
    
    5.17
    
    
    
    1.35Fourth Quarter
    
    
    3.53
    
    
    
    0.90Fiscal 2009:First Quarter (through March 31, 2009)
    
    $
    2.98
    
    
    $
    1.45
   PERFORMANCE GRAPH
    31




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Company / Index
    
    
    31-Jan-04
    
    
    29-Jan-05
    
    
    28-Jan-06
    
    
    03-Feb-07
    
    
    02-Feb-08
    
    
    31-Jan-09RETAIL VENTURES, INC.
    
    
    
    $100.00
    
    
    
    
    $110.35
    
    
    
    
    $212.52
    
    
    
    
    $337.06
    
    
    
    
    $118.53
    
    
    
    
    $39.30RUSSELL 2000
    
    
    
    $100.00
    
    
    
    
    $106.75
    
    
    
    
    $129.02
    
    
    
    
    $144.32
    
    
    
    
    $131.84
    
    
    
    
    $81.30S&P GENERAL MERCHANDISE STORES
    
    
    
    $100.00
    
    
    
    
    $119.21
    
    
    
    
    $124.43
    
    
    
    
    $146.36
    
    
    
    
    $132.96
    
    
    
    
    $80.72
 32




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ITEM 6. SELECTED FINANCIAL DATA.
  For the Fiscal Year Ended(1)February 2,
    
    February 3,
    
    January 28,
    
    January 29,January 31, 2009
    
    2008
    
    2007
    
    2006
    
    2005(dollars in thousands, except per share amounts and net sales per selling square foot)Net sales
    
    $
    1,462,944
    
    
    $
    1,405,615
    
    
    $
    1,279,060
    
    
    $
    1,144,061
    
    
    $
    961,089Operating profit before change in fair value
of derivative instruments (2)
    
    $
    42,813
    
    
    $
    81,321
    
    
    $
    100,714
    
    
    $
    70,112
    
    
    $
    58,925Change in fair value of derivative instruments
    
    $
    85,235
    
    
    $
    248,193
    
    
    $
    (175,955
    )
    
    $
    (144,209
    )Operating profit (loss)
    
    $
    128,048
    
    
    $
    329,514
    
    
    $
    (75,241
    )
    
    $
    (74,097
    )
    
    $
    58,925Income (loss) from continuing operations
    
    $
    99,220
    
    
    $
    241,967
    
    
    $
    (122,880
    )
    
    $
    (116,216
    )
    
    $
    36,747Loss from discontinued operations
    
    $
    (48,379
    )
    
    $
    (190,525
    )
    
    $
    (28,033
    )
    
    $
    (67,202
    )
    
    $
    (56,195
    )Net income (loss)
    
    $
    50,841
    
    
    $
    51,442
    
    
    $
    (150,913
    )
    
    $
    (183,418
    )
    
    $
    (19,448
    )Basic earnings (loss) per share from
continuing operations
    
    $
    2.04
    
    
    $
    5.02
    
    
    $
    (2.73
    )
    
    $
    (3.01
    )
    
    $
    1.08Diluted earnings (loss) per share from
continuing operations
    
    $
    2.00
    
    
    $
    4.26
    
    
    $
    (2.73
    )
    
    $
    (3.01
    )
    
    $
    0.77Basic loss per share from discontinued
operations
    
    $
    (0.99
    )
    
    $
    (3.96
    )
    
    $
    (0.62
    )
    
    $
    (1.74
    )
    
    $
    (1.65
    )Diluted loss per share from discontinued
operations
    
    $
    (0.98
    )
    
    $
    (3.35
    )
    
    $
    (0.62
    )
    
    $
    (1.74
    )
    
    $
    (0.96
    )Basic earnings (loss) per share
    
    $
    1.04
    
    
    $
    1.07
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )
    
    $
    (0.57
    )Diluted earnings (loss) per share
    
    $
    1.03
    
    
    $
    0.91
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )
    
    $
    (0.28
    )Total assets
    
    $
    953,762
    
    
    $
    951,966
    
    
    $
    1,301,658
    
    
    $
    1,175,154
    
    
    $
    1,270,227Working capital
    
    $
    307,776
    
    
    $
    295,862
    
    
    $
    274,439
    
    
    $
    147,746
    
    
    $
    179,767Current ratio
    
    
    2.20
    
    
    
    1.98
    
    
    
    1.45
    
    
    
    1.25
    
    
    
    1.43Long-term obligations, continuing operations
    
    $
    127,576
    
    
    $
    135,293
    
    
    $
    133,053
    
    
    $
    49,678
    
    
    $
    55,001Number of DSW Stores:(3)
    
    
    298
    
    
    
    259
    
    
    
    223
    
    
    
    199
    
    
    
    172DSW net sales per average gross square
foot(4)
    
    $
    196
    
    
    $
    212
    
    
    $
    218
    
    
    $
    217
    
    
    $
    217DSW comparable store sales change(5)
    
    
    (5.9
    )%
    
    
    (0.8
    )%
    
    
    2.5
    %
    
    
    5.4
    %
    
    
    5.0
    %
 
 (1)
    
    Fiscal year ended February 3, 2007 consists of 53 weeks. All other years reported
consist of 52 weeks.(2)
    
    The Company believes that the non-cash change in fair value of derivative
instruments is not directly related to its retail operations and is therefore providing
supplemental adjusted results that exclude this item. This financial measure should
facilitate analysis by investors and others who follow the Companys financial performance.(3)
    
    Includes all stores operating at the end of the fiscal year.(4)
    
    Presented in whole dollars and excludes leased departments. Average gross square
footage represents the monthly average of square feet for DSW stores only for each period
presented and consequently reflects the effect of opening stores in different months
throughout the period. Net sales per average gross square foot is the result of dividing net
sales for DSW stores only for the period presented, by average gross square footage.(5)
    
    Comparable DSW stores and comparable leased departments are those units that have
been in operation for at least 14 months at the beginning of the fiscal year. Stores or
leased departments, as the case may be, are added to the comparable base at the beginning of
the year and are dropped for comparative purposes in the quarter that they are closed. 
 33




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  OVERVIEW
      34




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##### Table of Contents



Key Financial Measures
    CRITICAL ACCOUNTING POLICIES
   35




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
    
    Revenue recognition. Revenues from merchandise sales are recognized upon customer receipt
of merchandise, net of returns and exclude sales tax and are not recognized until
collectability is reasonably assured. For dsw.com, we estimate a time lag for shipments to
record revenue when the customer receives the goods. We believe a one day change in our
estimate would not materially impact our revenue. Net sales also include revenue from
shipping and handling while the related costs are included in cost of sales.Revenue from gift cards is deferred and the revenue is recognized upon redemption of the gift
card. Our policy is to recognize income from breakage of gift cards when the likelihood of
redemption of the gift card is remote. In the fourth quarter of fiscal 2007, we determined
that we had accumulated enough historical data to recognize income from gift card breakage.
Miscellaneous income is included in selling, general and administrative expenses. We
recognized $0.8 million and $0.3 million as miscellaneous income from gift card breakage in
fiscal 2008 and fiscal 2007, respectively, excluding discontinued operations. Prior to the
fourth quarter of fiscal 2007, we had not recognized any income from gift card breakage.
    
    Cost of sales and merchandise inventories. We use the retail method of accounting for
substantially all of our merchandise inventories. Merchandise inventories are stated at the
realizable value, determined using the first-in, first-out basis, or market, using the
retail inventory method. The retail inventory method is widely used in the retail industry
due to its practicality. Under the retail inventory method, the valuation of inventories at
cost and the resulting gross margins are calculated by applying a calculated cost to retail
ratio to the retail value of inventories. The cost of the inventory reflected on our
consolidated balance sheet is decreased by charges to cost of sales at the time the retail
value of the inventory is lowered through the use of markdowns, which are reductions in
prices due to customers perception of value. Accordingly, earnings are negatively impacted
as merchandise is marked down prior to sale.Inherent in the calculation of inventories are certain significant management judgments and
estimates, including setting the original merchandise retail value or markon, markups of
initial prices established, markdowns and estimates of losses between physical inventory
counts or shrinkage, which, combined with the averaging process within the retail method, can
significantly impact the ending inventory valuation at cost, and the resulting gross profit.
If our estimate of shrinkage were to increase or decrease 0.5% as a percentage of net sales,
it would result in approximately $1.9 million decrease or increase to operating profit.
    
    Investments.DSW determines the appropriate balance sheet classification of its
investments at time of purchase and evaluates the classification at each balance sheet date.
If DSW has the intent and ability to hold the investments to maturity, investments are
classified as held-to-maturity. Held-to-maturity securities are stated at amortized cost
plus accrued interest. Otherwise, DSW investments are classified as available-for-sale.DSWs investments in auction rate securities are recorded at fair value under FAS 157 using an
income approach valuation model that uses level 3 inputs such as the financial condition of
the issuers of the underlying securities, expectations regarding the next successful auction,
risks in the auction rate securities market and other various assumptions. DSWs other types
of investments are valued using a market based approach using level 2 inputs such as prices of
similar assets in active markets. DSW believes that changes in its valuation model would not
result in a material change to earnings.DSW evaluates its investments for impairment and whether an impairment is
other-than-temporary. In determining whether an impairment has occurred, DSW reviews
information about the underlying investment that is publicly available and assesses its
ability to hold the securities for the foreseeable future. Based on the nature of the
impairment(s), DSW would record a temporary impairment as an unrealized loss in other
comprehensive income or an other-than-temporary impairment in earnings. The investment is
written down to its current market value at the time the impairment is deemed to have
occurred.
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##### Table of Contents




    
    Asset impairment and long-lived assets. We must periodically evaluate the carrying
amount of our long-lived assets, primarily property and equipment, and finite life
intangible assets when events and circumstances warrant such a review to ascertain if any
assets have been impaired. The carrying amount of a long-lived asset is considered impaired
when the carrying amount of the asset exceeds the expected future cash flows from the asset.
Our reviews are conducted at the lowest identifiable level which includes a store. The
impairment loss recognized is the excess of the carrying value of the asset over its fair
value, based on discounted future cash flows. Should an impairment loss be realized, it will
be included in operating expenses. Assets acquired for stores that have been previously
impaired are not capitalized when acquired if the stores expected future cash flow remains
negative. During fiscal 2008, 2007 and 2006, we recorded, excluding discontinued operations,
impairment losses of $3.3 million, $2.1 million, and $0.8 million, respectively, related to
long-lived assets at store operating units. We believe at this time that the carrying values
and useful lives of long-lived assets continue to be appropriate. We do not believe that
there will be material changes in the estimates or assumptions we use to calculate asset
impairments. To the extent these future projections or our strategies change, the
conclusion regarding impairment may differ from our current estimates.
    
    Self-insurance reserves. We record estimates for certain health and welfare, workers
compensation and casualty insurance costs that are self-insured programs. Self insurance
reserves include actuarial estimates of both claims filed, carried at their expected
ultimate settlement value, and claims incurred but not yet reported. Our liability
represents an estimate of the ultimate cost of claims incurred as of the balance sheet date.
Health and welfare, workers compensation and general liability estimates are calculated
utilizing claims development estimates based on historical experience and other factors. We
have purchased stop loss insurance to limit our exposure to any significant exposure on a
per person basis for health and welfare and on a per claim basis for workers compensation
and casualty insurance. Although we do not anticipate the amounts ultimately paid will
differ significantly from our estimates, self-insurance reserves could be affected if future
claims experience differs significantly from the historical trends and the actuarial
assumptions. For example, for workers compensation and general liability estimates, a 1%
increase or decrease to the assumptions for claims costs and loss development factors would
increase or decrease our self-insurance by approximately $0.1 million. The self-insurance
reserves, excluding discontinued operations, were $2.5 million and $2.1 million at the end
of fiscal 2008 and 2007, respectively. The decrease in self-insurance reserves was
principally associated with the decrease in general liability.
    
    Pension. The obligations and related assets of the Filenes Basement defined benefit
retirement plan are included in the operations held for sale at January 31, 2009 and are
presented in Note 10 of the Notes to Consolidated Financial Statements in this Annual Report
on Form 10-K. Plan assets, which consist primarily of marketable equity and debt
instruments, are valued using market quotations. Plan obligations and the annual pension
expense are determined by independent actuaries and through the use of a number of
assumptions. Key assumptions in measuring the plan obligations include the discount rate and
the estimated future return on plan assets. In determining the discount rate, we utilize the
yield on fixed-income investments currently available with maturities corresponding to the
anticipated timing of the benefit payments. Asset returns are based upon the anticipated
average rate of earnings expected on the invested funds of the plans. At January 31, 2009,
the weighted-average actuarial assumptions applied to our plan were a discount rate of 6.3%
and long-term rate of return on plan assets of 7.0%. At February 2, 2008, the
weighted-average actuarial assumptions applied to our plan were a discount rate of 6.0% and
long-term rate of return on plan assets of 8.0%. To the extent actual results vary from
assumptions, earnings would be impacted.
    
    Customer loyalty program. DSW maintains a customer loyalty program for the DSW stores and
dsw.com in which program members earn reward certificates that result in discounts on future
purchases. Upon reaching the target-earned threshold, the members receive reward
certificates for these discounts which must be redeemed within six months. DSW accrues the
anticipated redemptions of the discount earned at the time of the initial purchase. To
estimate these costs, DSW is required to make assumptions related to customer purchase
levels and redemption rates based on historical experience. The accrued liability as of
January 31, 2009 and February 2, 2008 was $7.3 million and $6.4 million, respectively.
    
    Change in fair value of derivative instruments. In accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended, the Company
recognizes all derivatives on the balance sheet at fair value. For derivatives that are not
designated as hedges under SFAS No. 133, changes in the fair values are recognized in
earnings in the period of change. The Company uses the Black-Scholes Pricing Model to
calculate the fair value of derivative instruments.For the fiscal years ended January 31, 2009 and February 2, 2008, the Company recorded a
benefit of $35.9 million and $154.6 million, respectively, related to the change in fair value
of warrants. For the fiscal years ended January 31, 2009 and February 2, 2008, the Company
recorded a benefit of $49.3 million and $93.6 million, respectively, related to the change in
the fair value of the conversion feature of the PIES. At January 31, 2009, if the estimated
discount rate were to have increased by 1%, the effect on the fair value of the warrants would
have been less than $0.1 million and would have decreased the fair value of the conversion
feature of the PIES by approximately $3.1 million.
 37




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##### Table of Contents




    
    Income taxes. We are required to determine the aggregate amount of income tax expense to
accrue and the amount which will be currently payable based upon tax statutes of each
jurisdiction in which we do business. In making these estimates, we adjust
income based on a determination of generally accepted accounting principles for items that are
treated differently by the applicable taxing authorities. Deferred tax assets and liabilities,
as a result of these differences, are reflected on our balance sheet for temporary differences
that will reverse in subsequent years. A valuation allowance is established against deferred
tax assets when it is more likely than not that some or all of the deferred tax assets will
not be realized. If our management had made these determinations on a different basis, our tax
expense, assets and liabilities could be different. During fiscal 2008, a decrease in
valuation reserve of $22.6 million for deferred tax assets was recorded. During fiscal 2007,
we established an additional valuation reserve of $61.1 million for deferred tax assets.Following the completion of the DSW IPO in June 2005, DSW is no longer included in Retail
Ventures consolidated federal tax return. Following the disposition of an 81% ownership
interest in the Value City operations during January 2008, Value City is no longer included in
Retail Ventures consolidated federal tax return.
    
    Sale of subsidiary stock.Sales of stock by a subsidiary are accounted for by Retail
Ventures as capital transactions.
 RESULTS OF OPERATIONS
  Seasonality
  Fiscal Year
  38




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##### Table of Contents



Fifty-two
    
    Fifty-two
    
    Fifty-threeWeeks
    
    Weeks
    
    WeeksEnded
    
    Ended
    
    EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    (57.5
    )
    
    
    (58.5
    )
    
    
    (56.9
    )Gross profit
    
    
    42.5
    
    
    
    41.5
    
    
    
    43.1Selling, general and administrative expenses
    
    
    (39.5
    )
    
    
    (35.8
    )
    
    
    (35.2
    )Change in fair value of derivative instruments
    
    
    5.8
    
    
    
    17.7
    
    
    
    (13.8
    )Operating profit (loss)
    
    
    8.8
    
    
    
    23.4
    
    
    
    (5.9
    )Interest expense
    
    
    (0.9
    )
    
    
    (1.0
    )
    
    
    (0.6
    )Interest income
    
    
    0.7
    
    
    
    1.3
    
    
    
    1.0Interest (expense) income, net
    
    
    (0.2
    )
    
    
    0.3
    
    
    
    0.4Income (loss) from continuing operations
before income taxes and minority interest
    
    
    8.6
    
    
    
    23.7
    
    
    
    (5.5
    )Income tax expense
    
    
    (1.1
    )
    
    
    (5.1
    )
    
    
    (2.2
    )Income (loss) from continuing operations
before minority interest
    
    
    7.5
    
    
    
    18.6
    
    
    
    (7.7
    )Minority interest
    
    
    (0.7
    )
    
    
    (1.4
    )
    
    
    (1.9
    )Net income (loss) from continuing operations
    
    
    6.8
    %
    
    
    17.2
    %
    
    
    (9.6
    )%
 Fiscal Year Ended January 31, 2009 (fiscal 2008) Compared To Fiscal Year Ended February 2, 2008
(fiscal 2007)
 Sales.
  Gross Profit.
 Selling, General and Administrative Expenses.
  Change in Fair Value of Derivatives.
 39




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##### Table of Contents



Operating Profit.
   Interest Expense.
 Interest Income.
 Non-operating Income.
 Income Taxes.
 Minority Interest.
 Income from Continuing Operations.
 Income (Loss) from Discontinued Operations  Value City Department Stores.
 Loss from Discontinued Operations  Filenes Basement.
 Fiscal Year Ended February 2, 2008 (fiscal 2007) Compared To Fiscal Year Ended February 3, 2007
(fiscal 2006)
 Sales. rd
 40




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##### Table of Contents



Gross Profit.
 Selling, General and Administrative Expenses.
  Change in Fair Value of Derivatives.
 Operating Profit (Loss).
   Interest Expense.
 Interest Income.
 Income Taxes.
 Minority Interest.
 41




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##### Table of Contents



Income (Loss) from Continuing Operations.
 Income (Loss) from Discontinued Operations  Value City.
  Loss from Discontinued Operations  Filenes Basement.
  Inflation and Deflation
  Liquidity and Capital Resources
     42




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##### Table of Contents



Operating Activities
   Investing Activities
     Financing Activities
  43




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##### Table of Contents



Revolving Credit Facilities
 $100 Million Secured Revolving Credit Facility   The Filenes Basement Revolving Loan
     $150 Million Secured Revolving Credit Facility  The DSW Revolving Loan
  44




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##### Table of Contents



Term Loans  Related Parties
   Payment of and Amendment to Term Loans
  Non-Convertible Loan  Related Parties
 $75 Million Senior Subordinated Convertible Loan
  $50 Million Second Amended and Restated Senior Loan Agreement  The Non-Convertible Loan
  45




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##### Table of Contents



$0.25 Million Senior Non-Convertible Loan
  $143,750,000 Premium Income Exchangeable Securities SM
       46




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##### Table of Contents



Auction Rate Securities
  Liquidity and Capital Resources Considerations Relating to the Value City Disposition
    Liquidity and Capital Resources Considerations Relating to the Filenes Basement Disposition
   Liquidity Relating to the Filenes Basement Downtown Crossing Boston Store
  Contractual Obligations
  47




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##### Table of Contents



Payments due by PeriodNoLess Than
    
    1 - 3
    
    3 - 5
    
    More Than
    
    ExpirationContractual Obligations(6)
    
    Total
    
    1 Year
    
    Years
    
    Years
    
    5 Years
    
    DateContinuing Operations:Longterm debt
    
    $
    134,000
    
    
    $
    250
    
    
    $
    133,750Interest payments on longterm debt(1)
    
    
    24,381
    
    
    
    8,875
    
    
    
    15,506Operating lease obligations (2)
    
    
    1,024,985
    
    
    
    135,614
    
    
    
    258,216
    
    
    $
    223,548
    
    
    $
    407,607Construction commitments  DSW(3)
    
    
    893
    
    
    
    893Other (4)
    
    
    2,996
    
    
    
    1,602
    
    
    
    1,394FIN 48 (5)
    
    
    2,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,354Total continuing operations
    
    $
    1,189,609
    
    
    $
    147,234
    
    
    $
    408,866
    
    
    $
    223,548
    
    
    $
    409,961Held for sale operations (7)
    
    $
    366,706
    
    
    $
    83,747
    
    
    $
    74,441
    
    
    $
    61,927
    
    
    $
    146,591Total
    
    $
    1,556,315
    
    
    $
    230,981
    
    
    $
    483,307
    
    
    $
    285,475
    
    
    $
    556,552
 (1)
    
    Projected interest payments are for the PIES and Non-Convertible Loan and are based
on the outstanding principal amount at January 31, 2009 and interest rate per the agreement.(2)
    
    Many operating leases require us, as part of the lease, to pay for common area
maintenance, real estate taxes and contingent rents. These costs vary year by year and are
based almost entirely on actual costs incurred by the landlord and as such are not included in
the lease obligations presented above.(3)
    
    Construction commitments include capital items to be purchased for projects that
were under construction, or for which a lease had been signed, as of January 31, 2009.(4)
    
    Other contractual obligations include purchase commitments, guarantees and
indemnifications. Many of our purchase commitments are cancelable by us without payment or
penalty, and we have excluded such commitments, along with all associate employment and
intercompany commitments.(5)
    
    The amount of FIN 48 obligations as of January 31, 2009, is $2.4 million,
including approximately $1.1 million of accrued interest and penalties. Uncertain tax benefits
are positions taken or expected to be taken on an income tax return that may result in
additional payments to tax authorities. The balance of the uncertain tax benefits are included
in the More Than 5 Years column as we are not able to reasonably estimate the timing of the
potential future payments.(6)
    
    Deferred taxes, minority interest, payments on RVI restricted stock units and
payments related to pension plans are not included in this table.(7)
    
    Projected interest payments for the Filenes Basement Revolving Loan are based on
the outstanding principal amount at January 31, 2009 and
interest rate per the agreement.    48




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##### Table of Contents



Certain Liquidity Issues of RVI
   Recent Accounting Pronouncements
  Off-Balance Sheet Arrangements
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  Investments
  ®
 49




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##### Table of Contents



Secured Revolving Credit Facilities
  Warrants
 VCHI Acquisition Co. Warrants
   Term Loan Warrants and Conversion Warrants
   Conversion Feature of PIES
  50




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
    Changes in Internal Control over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION.
   51




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 EXECUTIVE OFFICERS, ELECTION OF DIRECTORS OTHER DIRECTOR INFORMATION, COMMITTEES OF
DIRECTORS AND CORPORATE GOVERNANCE INFORMATION
 NYSE Certification
   
 Item 11. EXECUTIVE COMPENSATION.
 COMPENSATION OF MANAGEMENT OTHER DIRECTOR INFORMATION COMMITTEES OF DIRECTORS AND CORPORATE
GOVERNANCE INFORMATION  GENERAL
 
 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER
MATTERS.
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS and EQUITY
COMPENSATION PLAN INFORMATION
 52




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##### Table of Contents



Number of securitiesNumber of securities to be
    
    
    
    
    
    
    remaining available for issuanceissued upon exercise of
    
    
    Weighted-average exercise
    
    
    under equity compensation plansoutstanding options,
    
    
    price of outstanding options,
    
    
    (excluding securities reflected inPlan Category
    
    warrants and rights
    
    
    warrants and rights
    
    
    column (a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
(1)
    
    
    1,642,450
    
    
    $
    6.82
    
    
    
    5,575,493
    (2)Equity compensation
plans not approved
by security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    1,642,450
    
    
    $
    6.82
    
    
    
    5,575,493
 
 (1)
    
    Equity compensation plans approved by shareholders include the 1991 Plan and the 2000
Plan.(2)
    
    The number of common shares remaining available for issuance under the 2000 Plan
includes the common shares underlying outstanding SARs included in column (a) as such SARs
do not reduce the number of available common shares unless and until the Company elects to
exercise the Option Price Protection Provision and settle the SARs in common shares. No
further common shares may be granted under the 1991 Plan, excluding the common shares to
be issued upon exercise of outstanding options, warrants and other rights. 
 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS and OTHER DIRECTOR INFORMATION, COMMITTEES OF DIRECTORS
AND CORPORATE GOVERNANCE INFORMATION- CORPORATE GOVERNANCE PRINCIPLES.
 
 Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
 AUDIT AND
OTHER SERVICE FEES
 53




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 Page inForm 10-K15(a)(1) Financial StatementsThe documents listed below are filed as part of this Form 10-K:Report of Independent Registered Public Accounting Firm
    
    F-1Consolidated Balance Sheets at January 31, 2009 and February 2, 2008
    
    F-3Consolidated Statements of Operations for the years ended January 31, 2009, February 2, 2008
and February 3, 2007
    
    F-5Consolidated Statements of Shareholders Equity for the years ended January 31, 2009, February 2, 2008
and February 3, 2007
    
    F-6Consolidated Statements of Cash Flows for the years ended January 31, 2009, February 2, 2008
and February 3, 2007
    
    F-8Notes to Consolidated Financial Statements
    
    F-9
 15(a)(2) Consolidated Financial Statement Schedules:
   15(a)(3) and (b) Exhibits:
  15(c) Additional Financial Statement Schedules:
  54




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##### Table of Contents



SIGNATURES
  RETAIL VENTURES, INC.April 29, 2009
    By:
    /s/ James A. McGradyJames A. McGrady, Executive Vice President, ChiefExecutive Officer, Chief Financial Officer, Treasurer
and Secretary  Signature
    
    Title
    
    Date*
    
    Chairman of the Board of Directors
    
    April 29, 2009Jay L. Schottenstein/s/ James A. McGrady
    
    Executive Vice President, Chief Executive Officer, Chief Financial Officer,
    
    April 29, 2009James A. McGrady
    
    Treasurer
and Secretary (Principal Financial and Accounting Officer)*
    
    Director
    
    April 29, 2009Henry L. Aaron*
    
    Director
    
    April 29_, 2009Ari Deshe*
    
    Director
    
    April 29, 2009Jon P. Diamond*
    
    Director
    
    April 29, 2009Elizabeth M. Eveillard*
    
    Director
    
    April 29, 2009Lawrence J. Ring*
    
    Director
    
    April 29, 2009Harvey L. Sonnenberg*
    
    Director
    
    April 29, 2009James L. Weisman*
    
    Director
    
    April 29, 2009Heywood Wilansky
 *By:
    
    /s/ James A. McGradyJames A. McGrady (Attorney-in-fact)
 55




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##### Table of Contents



Accounting for the Impairment or Disposal of Long-Lived Assets
 Internal ControlIntegrated Framework
 
 F-1




---



##### Table of Contents



Internal
Control  Integrated Framework
    Internal Control 
Integrated Framework
  
 F-2




---



##### Table of Contents



RETAIL
VENTURES, INC.
 
 CONSOLIDATED BALANCE SHEETS
January 31, 2009 and February 2, 2008
(in thousands, except share amounts)
 January 31,
    
    
    February 2,2009
    
    
    2008ASSETSCash and equivalents
    
    $
    94,308
    
    
    $
    107,260Restricted cash
    
    
    261
    
    
    
    257Short-term investments, net
    
    
    101,404
    
    
    
    70,005Accounts receivable, net
    
    
    7,142
    
    
    
    12,126Accounts receivable from related parties
    
    
    332
    
    
    
    2,246Inventories
    
    
    244,008
    
    
    
    262,037Prepaid expenses and other current assets
    
    
    27,249
    
    
    
    25,843Deferred income taxes
    
    
    22,243
    
    
    
    20,421Current assets held for sale
    
    
    66,678
    
    
    
    98,414Total current assets
    
    
    563,625
    
    
    
    598,609Property and equipment, at cost:Furniture, fixtures and equipment
    
    
    233,616
    
    
    
    205,313Leasehold improvements
    
    
    158,294
    
    
    
    132,448391,910
    
    
    
    337,761Accumulated depreciation and amortization
    
    
    (155,555
    )
    
    
    (135,763
    )Property and equipment, net
    
    
    236,355
    
    
    
    201,998Goodwill
    
    
    25,899
    
    
    
    25,899Long-term investments, net
    
    
    1,266
    
    
    
    12,500Tradenames and other intangibles, net
    
    
    3,668
    
    
    
    4,522Conversion feature of long-term debt
    
    
    77,761
    
    
    
    30,848Deferred income taxes
    
    
    805Other assets
    
    
    5,590
    
    
    
    8,592Non current assets held for sale
    
    
    38,793
    
    
    
    68,998Total assets
    
    $
    953,762
    
    
    $
    951,966
  F-3




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##### Table of Contents



RETAIL VENTURES, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
January 31, 2009 and February 2, 2008
(in thousands, except share amounts)
 January 31,
    
    
    February 2,2009
    
    
    2008LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    93,088
    
    
    $
    116,242Accounts payable to related parties
    
    
    3,125
    
    
    
    1,433Accrued expenses:Compensation
    
    
    12,632
    
    
    
    5,424Taxes
    
    
    14,857
    
    
    
    18,635Gift cards and merchandise credits
    
    
    15,491
    
    
    
    14,231Guarantees from discontinued operations
    
    
    2,909
    
    
    
    17,477Other
    
    
    31,175
    
    
    
    34,714Warrant liability
    
    
    2,360
    
    
    
    936Warrant liability-related parties
    
    
    3,932
    
    
    
    41,277Current maturities of long-term debt
    
    
    250Current liabilities held for sale
    
    
    76,030
    
    
    
    52,378Total current liabilities
    
    
    255,849
    
    
    
    302,747Long-term obligations
    
    
    127,576
    
    
    
    135,293Other noncurrent liabilities
    
    
    109,290
    
    
    
    101,885Deferred income taxes
    
    
    29,806
    
    
    
    23,155Noncurrent liabilities held for sale
    
    
    36,055
    
    
    
    55,614Minority interest
    
    
    172,572
    
    
    
    160,349Commitments and contingenciesShareholders equity:Common shares, without par value; 160,000,000
authorized; issued and outstanding, including
7,551 treasury shares, 48,691,280 and 48,623,430
outstanding, respectively
    
    
    306,868
    
    
    
    305,254Accumulated deficit
    
    
    (76,930
    )
    
    
    (130,577
    )Treasury shares, at cost, 7,551 shares
    
    
    (59
    )
    
    
    (59
    )Warrants
    
    
    124
    
    
    
    124Accumulated other comprehensive loss
    
    
    (655
    )Accumulated other comprehensive loss held for sale
    
    
    (6,734
    )
    
    
    (1,819
    )Total shareholders equity
    
    
    222,614
    
    
    
    172,923Total liabilities and shareholders equity
    
    $
    953,762
    
    
    $
    951,966
  F-4




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##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended January 31, 2009, February 2, 2008 and February 3, 2007
(in thousands, except per share amounts)
 January 31,
    
    
    February 2,
    
    
    February 3,2009
    
    
    2008
    
    
    2007Net sales
    
    $
    1,462,944
    
    
    $
    1,405,615
    
    
    $
    1,279,060Cost of sales
    
    
    (841,593
    )
    
    
    (821,847
    )
    
    
    (728,361
    )Gross profit
    
    
    621,351
    
    
    
    583,768
    
    
    
    550,699Selling, general and administrative expenses
    
    
    (578,538
    )
    
    
    (502,447
    )
    
    
    (449,985
    )Change in fair value of derivative instruments
    
    
    55,226
    
    
    
    96,276
    
    
    
    (53,012
    )Change in fair value of derivative instruments- related parties
    
    
    30,009
    
    
    
    151,917
    
    
    
    (122,943
    )Operating profit (loss)
    
    
    128,048
    
    
    
    329,514
    
    
    
    (75,241
    )Interest expense
    
    
    (13,603
    )
    
    
    (13,896
    )
    
    
    (8,487
    )Interest income
    
    
    11,269
    
    
    
    18,631
    
    
    
    13,101Interest (expense) income, net
    
    
    (2,334
    )
    
    
    4,735
    
    
    
    4,614Non-operating income
    
    
    352Income (loss) from continuing operations before income taxes
and minority interest
    
    
    126,066
    
    
    
    334,249
    
    
    
    (70,627
    )Income tax expense
    
    
    (16,886
    )
    
    
    (72,403
    )
    
    
    (28,087
    )Income (loss) from continuing operations before minority interest
    
    
    109,180
    
    
    
    261,846
    
    
    
    (98,714
    )Minority interest
    
    
    (9,960
    )
    
    
    (19,879
    )
    
    
    (24,166
    )Income (loss) from continuing operations
    
    
    99,220
    
    
    
    241,967
    
    
    
    (122,880
    )Income (loss) from discontinued operations, net of tax  Value City
    
    
    13,223
    
    
    
    (150,662
    )
    
    
    (22,271
    )Loss from discontinued operations, net of tax  Filenes Basement
    
    
    (61,602
    )
    
    
    (39,863
    )
    
    
    (5,762
    )Total loss from discontinued operations, net of tax
    
    
    (48,379
    )
    
    
    (190,525
    )
    
    
    (28,033
    )Net income (loss)
    
    $
    50,841
    
    
    $
    51,442
    
    
    $
    (150,913
    )Basic earnings (loss) per share from continuing operations
    
    $
    2.04
    
    
    $
    5.02
    
    
    $
    (2.73
    )Diluted earnings (loss) per share from continuing operations
    
    $
    2.00
    
    
    $
    4.26
    
    
    $
    (2.73
    )Basic loss per share from discontinued operations
    
    $
    (0.99
    )
    
    $
    (3.96
    )
    
    $
    (0.62
    )Diluted loss per share from discontinued operations
    
    $
    (0.98
    )
    
    $
    (3.35
    )
    
    $
    (0.62
    )Basic earnings (loss) per share
    
    $
    1.04
    
    
    $
    1.07
    
    
    $
    (3.35
    )Diluted earnings (loss) per share
    
    $
    1.03
    
    
    $
    0.91
    
    
    $
    (3.35
    )Basic shares
    
    
    48,669
    
    
    
    48,165
    
    
    
    45,088Diluted shares
    
    
    49,526
    
    
    
    56,794
    
    
    
    45,088
  F-5




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##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
Years Ended January 31, 2009, February 2, 2008 and February 3, 2007
(in thousands)
 TotalNumber of Shares
    
    
    
    
    
    
    
    
    
    
    Retained
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    Deferred
    
    
    
    
    
    
    OtherCommon
    
    
    Shares in
    
    
    Common
    
    
    
    
    
    
    (Accumulated
    
    
    Compensation
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Treasury
    
    
    Shares
    
    
    Warrants
    
    
    Deficit)
    
    
    Expense
    
    
    Shares
    
    
    Loss
    
    
    TotalBalance, January
28, 2006
    
    
    39,865
    
    
    
    8
    
    
    $
    159,617
    
    
    $
    
    
    
    $
    (36,082
    )
    
    $
    (1
    )
    
    $
    (59
    )
    
    $
    (6,929
    )
    
    $
    116,546Loss from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,880
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,880
    )Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,033
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,033
    )Change in minimum
pension liability,
net of income tax
expense of $44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    500Change in minimum
pension liability,
net of income tax
expense of $109,
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    692
    
    
    
    692Total
comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149,721
    )Capital
transactions of
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,534
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,534Stock based
compensation
expense, before
related tax effects
    
    
    
    
    
    
    
    
    
    
    634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    634Exercise of stock
options
    
    
    406
    
    
    
    
    
    
    
    2,934
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,934Exercise of warrants
    
    
    7,000
    
    
    
    
    
    
    
    110,317
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,317Deferred income tax
adjustment
    
    
    
    
    
    
    
    
    
    
    3,189
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,189Reclassification of
unamortized
deferred
compensation
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    1Adjustment to
initially apply
FASB Statement No.
158, net of tax
expense of $1,543
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,403
    
    
    
    2,403Adjustment to
initially apply
FASB Statement No.
158, net of tax
expense of $1,787,
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,784
    
    
    
    2,784Balance, February
3, 2007
    
    
    47,271
    
    
    
    8
    
    
    $
    276,690
    
    
    $
    
    
    
    $
    (184,461
    )
    
    $
    
    
    
    $
    (59
    )
    
    $
    (550
    )
    
    $
    91,620Income from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241,967
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241,967Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (190,525
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (190,525
    )Change in minimum
pension liability,
net of income tax
expense of $1,004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,269
    )
    
    
    (1,269
    )Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,173Capital
transactions of
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,083
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,083Cumulative effect
of FIN 48 adoption
for discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (641
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (641
    )Reclassification of
stock appreciation
rights
    
    
    
    
    
    
    
    
    
    
    1,934
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,934Stock based
compensation
expense, before
related tax effects
    
    
    
    
    
    
    
    
    
    
    947
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    947Exercise of stock
options
    
    
    19
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71Exercise of warrants
    
    
    1,333
    
    
    
    
    
    
    
    25,612
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,612Issuance of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124Balance, February
2, 2008
    
    
    48,623
    
    
    
    8
    
    
    $
    305,254
    
    
    $
    124
    
    
    $
    (130,577
    )
    
    $
    
    
    
    $
    (59
    )
    
    $
    (1,819
    )
    
    $
    172,923
 F-6




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##### Table of Contents



RETAIL VENTURES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Continued)
Years Ended January 31, 2009, February 2, 2008 and February 3, 2007
(in thousands)
 TotalNumber of Shares
    
    
    
    
    
    
    
    
    
    
    Retained
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    Deferred
    
    
    
    
    
    
    OtherCommon
    
    
    Shares in
    
    
    Common
    
    
    
    
    
    
    (Accumulated
    
    
    Compensation
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Treasury
    
    
    Shares
    
    
    Warrants
    
    
    Deficit)
    
    
    Expense
    
    
    Shares
    
    
    Loss
    
    
    TotalBalance, February
2, 2008
    
    
    48,623
    
    
    
    8
    
    
    $
    305,254
    
    
    $
    124
    
    
    $
    (130,577
    )
    
    $
    
    
    
    $
    (59
    )
    
    $
    (1,819
    )
    
    $
    172,923Income from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,220Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,379
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,379
    )Change in minimum
pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,245
    )
    
    
    (2,245
    )Valuation allowance
on pension deferred
tax asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,670
    )
    
    
    (2,670
    )Unrealized loss on
available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (655
    )
    
    
    (655
    )Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,271Capital
transactions of
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,806
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,806Stock based
compensation
expense, before
related tax effects
    
    
    
    
    
    
    
    
    
    
    1,407
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,407Exercise of stock
options
    
    
    68
    
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207Balance, January
31, 2009
    
    
    48,691
    
    
    
    8
    
    
    $
    306,868
    
    
    $
    124
    
    
    $
    (76,930
    )
    
    $
    
    
    
    $
    (59
    )
    
    $
    (7,389
    )
    
    $
    222,614
  F-7




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##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended January 31, 2009, February 2, 2008 and February 3, 2007
(in thousands)
 January 31,
    
    
    February 2,
    
    
    February 3,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    50,841
    
    
    $
    51,442
    
    
    $
    (150,913
    )Less: Loss from discontinued operations, net of tax
    
    
    48,379
    
    
    
    190,525
    
    
    
    28,033Income (loss) before discontinued operations
    
    
    99,220
    
    
    
    241,967
    
    
    
    (122,880
    )Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:Amortization of debt issuance costs and discount on debt
    
    
    3,369
    
    
    
    3,339
    
    
    
    1,666Stock based compensation expense
    
    
    1,407
    
    
    
    947
    
    
    
    634Capital transactions of subsidiary
    
    
    2,806
    
    
    
    3,083
    
    
    
    2,534Depreciation and amortization
    
    
    38,466
    
    
    
    28,298
    
    
    
    23,790Change in fair value of derivative instruments (($30,009), ($151,917) and
$122,943 - related party)
    
    
    (85,235
    )
    
    
    (248,193
    )
    
    
    175,955Gain on the repurchase of the Premium Income Exchangeable Securities
    
    
    (1,486
    )Deferred income taxes and other noncurrent liabilities
    
    
    (6,263
    )
    
    
    46,379
    
    
    
    (18,585
    )Impairment charges on long-lived assets
    
    
    3,339
    
    
    
    2,081
    
    
    
    832Loss on disposal of assets
    
    
    2,235
    
    
    
    261
    
    
    
    809Other-than-temporary impairment charges on long-term investments, net
    
    
    1,134Minority interest in consolidated subsidiary
    
    
    9,960
    
    
    
    19,879
    
    
    
    24,166Other
    
    
    2,263
    
    
    
    (185
    )
    
    
    1,866Change in working capital, assets and liabilities:Accounts receivable
    
    
    6,314
    
    
    
    (5,624
    )
    
    
    (3,492
    )Inventories
    
    
    18,029
    
    
    
    (24,300
    )
    
    
    (21,039
    )Prepaid expenses and other assets
    
    
    (53
    )
    
    
    (3,606
    )
    
    
    (8,726
    )Accounts payable
    
    
    (17,566
    )
    
    
    16,419
    
    
    
    30,795Proceeds from lease incentives
    
    
    16,106
    
    
    
    14,002
    
    
    
    7,490Accrued expenses
    
    
    1
    
    
    
    (27,469
    )
    
    
    4,713Net cash provided by operating activities from continuing operations
    
    
    94,046
    
    
    
    67,278
    
    
    
    100,528Net cash (used in) provided by operating activities from discontinued
operations
    
    
    (13,984
    )
    
    
    21,897
    
    
    
    (3,548
    )Cash flows from investing activities:Cash paid for property and equipment
    
    
    (79,651
    )
    
    
    (98,335
    )
    
    
    (42,533
    )Purchases of available-for-sale investments
    
    
    (205,558
    )
    
    
    (209,855
    )
    
    
    (188,250
    )Purchases of held-to-maturity investments
    
    
    (2,000
    )Maturities and sales of available-for-sale investments
    
    
    183,604
    
    
    
    226,000
    
    
    
    89,600Maturities and sales of held-to-maturity investments
    
    
    2,000Acquisition of tradename
    
    
    
    
    
    
    (21
    )Net cash used in investing activities from continuing operations
    
    
    (101,605
    )
    
    
    (82,211
    )
    
    
    (141,183
    )Net cash used in investing activities from discontinued operations
    
    
    (4,014
    )
    
    
    (17,731
    )
    
    
    (23,532
    )Cash flows from financing activities:Payments on notes to discontinued operations
    
    
    
    
    
    
    (25,000
    )

    
    
    (111,678
    )Proceeds from issuance of Premium Income Exchangeable Securities
    
    
    
    
    
    
    
    
    
    
    143,750Repurchase of Premium Income Exchangeable Securities
    
    
    (5,600
    )Debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (6,156
    )Proceeds from exercise of warrants
    
    
    
    
    
    
    6,000
    
    
    
    31,500Proceeds from exercise of stock options
    
    
    207
    
    
    
    71
    
    
    
    2,934Net cash (used in) provided by financing activities from continuing operations
    
    
    (5,393
    )
    
    
    (18,929
    )
    
    
    60,350Net cash
provided by (used in) financing activities from discontinued operations
    
    
    17,083
    
    
    
    (17,574
    )
    
    
    28,875Net (decrease) increase in cash and equivalents from continuing operations
    
    $
    (12,952
    )
    
    $
    (33,862
    )
    
    $
    19,695Cash and equivalents from continuing operations, beginning of year
    
    
    107,260
    
    
    
    141,122
    
    
    
    121,427Cash and equivalents from continuing operations, end of year
    
    $
    94,308
    
    
    $
    107,260
    
    
    $
    141,122Net (decrease) increase in cash and equivalents from discontinued operations
    
    $
    (915
    )
    
    $
    (13,408
    )
    
    $
    1,795Cash and equivalents from discontinued operations, beginning of year
    
    
    5,691
    
    
    
    19,099
    
    
    
    17,304Cash and equivalents from discontinued operations, end of year
    
    $
    4,776
    
    
    $
    5,691
    
    
    $
    19,099
  F-8




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##### Table of Contents



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business Operations
    Accounting for Impairment or
Disposal of Long-Lived Assets
  Principles of Consolidation
  F-9




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##### Table of Contents



Fiscal Year
  Use of Estimates
  Cash and Equivalents
  Investments
   Accounts Receivable
  Concentration of Credit Risk
  Concentration of Vendor Risk
  Allowance for Doubtful Accounts
  F-10




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##### Table of Contents



Inventories
   Pre-Opening Expenses
  Property and Equipment
  Asset Impairment and Long-Lived Assets
  Goodwill
 Goodwill
and Other Intangible Assets
  Tradenames and Other Intangible Assets
  F-11




---



##### Table of Contents



January 31,
    
    
    February 2,2009
    
    
    2008(Dollars in thousands)Not subject to amortizationDomain names
    
    $
    21
    
    
    $
    21Subject to amortizationTradenames:Gross asset
    
    $
    12,750
    
    
    $
    12,750Accumulated amortization
    
    
    (9,138
    )
    
    
    (8,287
    )Subtotal
    
    $
    3,612
    
    
    $
    4,463Useful life
    
    15 years
    
    

    15 yearsFavorable leases:Gross asset
    
    $
    140
    
    
    $
    140Accumulated amortization
    
    
    (105
    )
    
    
    (102
    )Subtotal
    
    $
    35
    
    
    $
    38Useful life
    
    14 years
    

    
    14 yearsTradenames and other intangible assets, net
    
    $
    3,668
    
    
    $
    4,522
  Fiscal Year
    
    (in thousands)2008
    
    $
    8542009
    
    $
    8542010
    
    $
    8542011
    
    $
    8542012
    
    $
    8542013
    
    $
    216
 Self-insurance Reserves
  Deferred Rent
  F-12




---



##### Table of Contents



Construction and Tenant Allowances
  Accumulated Other Comprehensive Loss
  Sales and Revenue Recognition
   Customer Loyalty Program
  Derivative Financial Instruments
 Accounting for Derivative Instruments and Hedging Activities
 Minority Interest
  F-13




---



##### Table of Contents



Earnings Per Share
  Stock-Based Compensation
 Share-Based Payment
 Comprehensive Income (Loss)
  Legal Proceedings and Claims
 Accounting for Contingencies
 Income Taxes
 Accounting for Income Taxes
 Sale of subsidiary stock
  Recent Accounting Pronouncements
 Fair Value Measurements
 Effective Date of FASB Statement No.
157
 F-14




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##### Table of Contents



Determining the Fair Value of a Financial Asset in
a Market That is Not Active
 The Fair Value Option for Financial Assets and
Financial Liabilities
  Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities,
 Determining whether an
Instrument (or Embedded Feature) is indexed to an Entitys Own Stock Accounting for Derivatives and Hedging
Activities
 Accounting for an Instrument (or an Embedded
Feature) with a Settlement Amount That Is Based on the Stock of an Entitys Consolidated Subsidiary
 F-15




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##### Table of Contents



Determination of the Useful
Life of Intangible Assets
 Accounting for Convertible Debt Instruments that May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement)
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings Per Share
  2. DISCONTINUED OPERATIONS AND HELD FOR SALE OPERATIONS
 Value City
     F-16




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##### Table of Contents



Fiscal Year EndedJanuary 31,

    
    February 2,
    
    February 3,2009
    
    2008
    
    2007(in thousands)Net sales
    
    
    

    
    
    $
    1,172,687
    
    
    $
    1,361,125Loss before income taxes
    
    
    
    
    
    $
    (60,653
    )
    
    $
    (33,514
    )Income tax
benefit
    

    
    
    
    
    
    
    
    
    
    11,243Income (Loss) on
disposal
    
    $
    13,223
    

    
    
    (90,009
    )Income (Loss) from discontinued operations, net of tax - Value City
    

    $
    13,223
    



    
    $
    (150,662
    )
    
    $
    (22,271
    )
 Filenes Basement
    Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007(in thousands)Net sales
    
    $
    422,099
    
    
    $
    466,289
    
    
    $
    427,473Loss before income taxes
    
    $
    (62,003
    )
    
    $
    (25,658
    )
    
    $
    (7,977
    )Income tax benefit (expense)
    
    
    401
    
    
    
    (14,205
    )
    
    
    2,215Loss from
discontinued operations, net of tax - Filenes Basement
    
    $
    (61,602
    )
    
    $
    (39,863
    )
    
    $
    (5,762
    )
 F-17




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##### Table of Contents



January 31,
    
    February 2,2009
    
    2008Cash
    
    $
    4,776
    
    
    $
    5,691Accounts receivable, net
    
    
    1,670
    
    
    
    2,248Inventories
    
    
    58,384
    
    
    
    77,283Prepaid expenses and other
    
    
    1,848
    
    
    
    5,388Deferred Income Taxes
    
    
    
    
    
    
    7,804Total current assets
    
    
    66,678
    
    
    
    98,414Property and equipment, net
    
    
    33,590
    
    
    
    52,662Tradenames and intangibles, net
    
    
    4,255
    
    
    
    15,405Other non current assets
    
    
    948
    
    
    
    931Total non current assets
    
    
    38,793
    
    
    
    68,998Total assets
    
    $
    105,471
    
    
    $
    167,412Accounts payable, net
    
    $
    18,805
    
    
    $
    34,657Accrued expenses
    
    
    17,642
    
    
    
    17,721Revolving
credit facility
    
    
    39,583Total current liabilities
    
    
    76,030
    
    
    
    52,378Long-term obligations, net of current maturities
    
    
    
    
    
    
    22,500Other non current liabilities
    
    
    36,055
    
    
    
    26,613Deferred income taxes
    
    
    
    
    
    
    6,501Total non current liabilities
    
    
    36,055
    
    
    
    55,614Total liabilities
    
    $
    112,085
    
    
    $
    107,992
  3. RELATED PARTY TRANSACTIONS
     F-18




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##### Table of Contents



4. STOCK BASED COMPENSATION
 Accounting for Stock Issued to Employees
    Retail Ventures Stock Compensation Plans
     Stock Options
  F-19




---



##### Table of Contents



Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Assumptions:Risk-free interest rate
    
    
    2.2
    %
    
    
    4.4
    %
    
    
    4.6
    %Expected volatility of Retail Ventures Common Shares
    
    
    66.5
    %
    
    
    56.1
    %
    
    
    62.5
    %Expected option term
    
    5.0 years
    
    5.0 years
    
    4.8 yearsExpected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
  Fiscal Year Ended January 31, 2009
    
    Shares
    
    
    WAEPOutstanding beginning of year
    
    
    1,312
    
    
    $
    5.97Granted
    
    
    250
    
    
    $
    2.89Exercised
    
    
    (68
    )
    
    $
    3.05Canceled
    
    
    (247
    )
    
    $
    7.95Outstanding end of year
    
    
    1,247
    
    
    $
    5.13Options exercisable end of year
    
    
    1,045
    
    
    $
    5.74Shares available for additional grants
    
    
    5,575
 WeightedAverage
    
    AggregateRemaining
    
    IntrinsicFiscal Year Ended January 31, 2009
    
    Shares
    
    WAEP
    
    GDFV
    
    Contract Life
    
    ValueOptions outstanding
    
    
    1,247
    
    
    $
    5.13
    
    
    $
    3.10
    
    
    4 years
    
    $
    331Options vested or expected to vest
    
    
    1,232
    
    
    $
    5.17
    
    
    $
    3.13
    
    
    4 years
    
    $
    315Options exercisable
    
    
    1,045
    
    
    $
    5.74
    
    
    $
    3.49
    
    
    3 years
    
    $
    119
   Stock Appreciation Rights
  F-20




---



##### Table of Contents



Fiscal Year Ended January 31, 2009
    
    Shares
    
    
    WAEPOutstanding beginning of year
    
    
    725
    
    
    $
    11.66GrantedExercisedCanceled
    
    
    (330
    )
    
    $
    11.04Outstanding end of year
    
    
    395
    
    
    $
    12.18Exercisable end of year
    
    
    251
    
    
    $
    9.41
 Restricted Stock Units
     January 31,
    
    February 2,2009
    
    2008Outstanding beginning of year
    
    
    57
    
    
    
    170Granted
    
    
    
    
    
    
    47Exercised/Vested
    
    
    (35
    )
    
    
    (160
    )Forfeited
    
    
    (10
    )Outstanding end of year
    
    
    12
    
    
    
    57
 F-21




---



##### Table of Contents



Restricted Shares
  DSW Stock Compensation Plan
  Stock Options
   Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Assumptions:Risk-free interest rate
    
    
    2.7
    %
    
    
    4.5
    %
    
    
    4.6
    %Expected volatility of Retail Ventures Common Shares
    
    
    48.5
    %
    
    
    39.4
    %
    
    
    39.9
    %Expected option term
    
    4.9 years
    
    5.0 years
    
    4.8 yearsExpected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
  Fiscal Year Ended January 31, 2009
    
    Shares
    
    
    WAEPOutstanding beginning of year
    
    
    1,520
    
    
    $
    28.65Granted
    
    
    1,112
    
    
    $
    12.87Exercised
    
    
    (1
    )
    
    $
    12.92Canceled
    
    
    (506
    )
    
    $
    21.85Outstanding end of year
    
    
    2,125
    
    
    $
    22.04Options exercisable end of year
    
    
    533
    
    
    $
    24.77Shares available for additional grants
    
    
    2,102
 F-22




---



##### Table of Contents



WeightedAverage
    
    AggregateRemaining
    
    IntrinsicFiscal Year Ended January 31, 2009
    
    Shares
    
    WAEP
    
    GDFV
    
    Contract Life
    
    ValueOptions outstanding
    
    
    2,125
    
    
    $
    22.04
    
    
    $
    9.47
    
    
    8 years
    
    $
    124Options vested or expected to vest
    
    
    2,007
    
    
    $
    22.10
    
    
    $
    9.49
    
    
    8 years
    
    $
    115Options exercisable
    
    
    533
    
    
    $
    24.77
    
    
    $
    10.56
    
    
    7 years
    
    $
    0
  Restricted Stock Units
    Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Units
    
    GDFV
    
    Units
    
    GDFV
    
    Units
    
    GDFVOutstanding beginning of year
    
    
    151
    
    
    $
    23.92
    
    
    
    135
    
    
    $
    22.03
    
    
    
    131
    
    
    $
    20.46Granted
    
    
    158
    
    
    $
    12.61
    
    
    
    29
    
    
    $
    28.69
    
    
    
    23
    
    
    $
    30.91Exercised/Vested
    
    
    (8
    )
    
    $
    26.61
    
    
    
    (10
    )
    
    $
    24.85
    
    
    
    (10
    )
    
    $
    24.85Forfeited
    
    
    (75
    )
    
    $
    19.08
    
    
    
    (3
    )
    
    $
    27.96
    
    
    
    (9
    )
    
    $
    19.00Outstanding end of year
    
    
    226
    
    
    $
    17.51
    
    
    
    151
    
    
    $
    23.92
    
    
    
    135
    
    
    $
    22.03
 Director Stock Units
  F-23




---



##### Table of Contents



5. INVESTMENTS
      Short-term Investments, net
    
    
    Long-term Investments, netFiscal Year Ended
    
    
    Fiscal Year EndedJanuary 31,
    
    
    February 2,
    
    
    January 31,
    
    
    February 2,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Available for sale:Tax exempt bonds
    
    $
    64,829Tax advantaged bonds
    
    
    1,000Variable rate demand notes
    
    
    16,580
    
    
    $
    44,505Tax exempt commercial paper
    
    
    2,000Certificates of deposit
    
    
    14,000Auction rate securities
    
    
    3,650
    
    
    
    25,500
    
    
    $
    2,400
    
    
    $
    12,500Other-than-temporary impairment included in earnings
    
    
    
    
    
    
    
    
    
    
    (1,134
    )Unrealized losses included in accumulated other
    
    
    (655
    )Total available for sale investments
    
    $
    101,404
    
    
    $
    70,005
    
    
    $
    1,266
    
    
    $
    12,500
 6. LEASES
  F-24




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##### Table of Contents



Continuing OperationsUnrelated
    
    Related
    
    FilenesFiscal Year
    
    Total
    
    Party
    
    Party
    
    Basement2009
    
    $
    135,614
    
    
    $
    123,321
    
    
    $
    12,293
    
    
    $
    39,0622010
    
    
    132,853
    
    
    
    120,128
    
    
    
    12,725
    
    
    
    37,6922011
    
    
    125,363
    
    
    
    112,508
    
    
    
    12,855
    
    
    
    35,9762012
    
    
    116,013
    
    
    
    102,907
    
    
    
    13,106
    
    
    
    31,5142013
    
    
    107,535
    
    
    
    94,995
    
    
    
    12,540
    
    
    
    30,412Future Years
    
    
    407,607
    
    
    
    333,261
    
    
    
    74,346
    
    
    
    146,591Total minimum lease payments
    
    $
    1,024,985
    
    
    $
    887,120
    
    
    $
    137,865
    
    
    $
    321,247
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Continuing operations:Minimum rentals:Unrelated parties
    
    $
    103,382
    
    
    $
    92,396
    
    
    $
    82,536Related parties
    
    
    11,178
    
    
    
    10,561
    
    
    
    8,796Contingent rentals:Unrelated parties
    
    
    28,261
    
    
    
    25,391
    
    
    
    17,721Related parties
    
    
    11,967Total continuing operations
    
    $
    154,788
    
    
    $
    128,348
    
    
    $
    109,053Filenes Basement
    
    
    36,940
    
    
    
    35,369
    
    
    
    27,748Total
    
    $
    191,728
    
    
    $
    163,717
    
    
    $
    136,801
  7. LONG TERM OBLIGATIONS
  Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Continuing
Operations:Credit facilities:Senior Loan Agreement  related parties
    
    $
    250
    
    
    $
    250Premium Income Exchangeable Securities (PIES)
    
    
    133,750
    
    
    
    143,750Discount on PIES
    
    
    (6,174
    )
    
    
    (8,707
    )127,826
    
    
    
    135,293Less: current maturities
    
    
    (250
    )Total long term obligations of continuing operations
    
    $
    127,576
    
    
    $
    135,293Discontinued
Operations:Filenes Basement revolving credit facility
    
    $
    39,583
    
    
    $
    22,500Less: current
maturities
    
    
    (39,583
    )Total long
term obligations of discontinued operations
    
    
    
    
    
    $
    22,500Total
    
    $
    127,576
    
    
    $
    157,793
 F-25




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##### Table of Contents



Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Letters of credit outstanding:Filenes Basement revolving credit facility
    
    $
    2,947
    
    
    $
    3,360DSW revolving credit facility
    
    $
    17,709
    
    
    $
    15,711Availability under revolving credit facilities:Filenes Basement revolving credit facility
    
    
    
    
    
    $
    26,996DSW revolving credit facility
    
    $
    132,291
    
    
    $
    134,289
      Revolving Credit Facilities
 $100 Million Secured Revolving Credit Facility   The Filenes Basement Revolving Loan
   F-26




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##### Table of Contents



$150 Million Secured Revolving Credit Facility  The DSW Revolving Loan
  Term Loans  Related Parties
   Payment of and Amendment to Term Loans
  Non-Convertible Loan  Related Parties
 $75 Million Senior Subordinated Convertible Loan
  F-27




---



##### Table of Contents



$50 Million Second Amended and Restated Senior Loan Agreement  The Non-Convertible Loan
  $0.25 Million Senior Non-Convertible Loan
  $143,750,000 Premium Income Exchangeable Securities SM (PIES)
    F-28




---



##### Table of Contents



Other Debt Items
    Fiscal Year
    
    Amount(in thousands)2009
    
    $
    25020102011
    
    
    133,75020122013Future YearsTotal
    
    $
    134,000
 F-29




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##### Table of Contents



8. FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS AND LIABILITIES
  
    
    Level 1 inputs are unadjusted quoted prices in active markets for identical assets or
liabilities that are publicly accessible. Active markets have frequent transactions with
enough volume to provide ongoing pricing information.
    
    Level 2 inputs are other than level 1 inputs that are directly or indirectly observable.
These can include unadjusted quoted prices for similar assets or liabilities in active
markets, unadjusted quoted prices for identical assets or liabilities in inactive markets,
or other observable inputs.
    
    Level 3 inputs are unobservable inputs.
  Total
    
    Level 1
    
    Level 2
    
    Level 3(in thousands)Assets:Cash and equivalents
    
    $
    94,308
    
    
    $
    94,308Restricted Cash
    
    
    261
    
    
    
    261Short-term investments, net
    
    
    101,404
    
    
    
    
    
    
    $
    99,559
    
    
    $
    1,845Long-term investments, net
    
    
    1,266
    
    
    
    
    
    
    
    
    
    
    
    1,266Conversion feature of long-term debt
    
    
    77,761
    
    
    
    
    
    
    
    77,761$
    275,000
    
    
    $
    94,569
    
    
    $
    177,320
    
    
    $
    3,111Liabilities:Warrant liability
    
    $
    6,292
    
    
    
    
    
    
    $
    6,292$
    6,292
    
    
    
    
    
    
    $
    6,292
   Short-term
    
    Long-termInvestments, net
    
    Investments, net(in thousands)Carrying value as of February 2, 2008
    
    $
    70,005
    
    
    $
    12,500Maturities and sales
    
    
    (68,855
    )
    
    
    (7,600
    )Transfers into short-term investments
    
    
    2,500Transfers from long-term investments
    
    
    
    
    
    
    (2,500
    )Transfers out of level 3
    
    
    (1,150
    )Other-than-temporary impairment included in earnings
    
    
    
    
    
    
    (1,134
    )Unrealized losses included in accumulated other comprehensive loss
    
    
    (655
    )Carrying value as of January 31, 2009
    
    $
    1,845
    
    
    $
    1,266
 F-30




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##### Table of Contents



9. EARNINGS PER SHARE
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007(in thousands)Assumed exercise of dilutive weighted average shares outstanding
    
    
    48,669
    
    
    
    48,165
    
    
    
    45,088Assumed exercise of dilutive stock appreciation rights
    
    
    6
    
    
    
    227Assumed exercise of dilutive stock options
    
    
    144
    
    
    
    527Assumed exercise of dilutive term loan warrants
    
    
    245
    
    
    
    2,607Assumed exercise of dilutive conversion warrants
    
    
    462
    
    
    
    5,268Number of shares for computation of dilutive earnings per share
    
    
    49,526
    
    
    
    56,794
    
    
    
    45,088
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007VCHI warrants
    
    
    150
    
    
    
    150Stock options
    
    
    974
    
    
    
    334
    
    
    
    1,335SARs
    
    
    445
    
    
    
    499
    
    
    
    978Term loan warrants
    
    
    
    
    
    
    
    
    
    
    4,413Conversion warrants
    
    
    
    
    
    
    
    
    
    
    9,667Total of all potentially dilutive instruments
    
    
    1,569
    
    
    
    983
    
    
    
    16,393
 10. PENSION BENEFIT PLANS
   Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    16,307
    
    
    $
    15,848Interest cost
    
    
    935
    
    
    
    907Benefits paid
    
    
    (715
    )
    
    
    (1,169
    )Actuarial gain (loss)
    
    
    (186
    )
    
    
    721Projected benefit obligation at end of year
    
    $
    16,341
    
    
    $
    16,307Accumulated benefit obligation at end of year
    
    $
    16,341
    
    
    $
    16,307
 F-31




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##### Table of Contents



Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Change in plan assets:Fair market value at beginning of year
    
    $
    14,563
    
    
    $
    15,464Actual loss
on plan assets
    
    
    (2,661
    )
    
    
    (449
    )Employer contributions
    
    
    500
    
    
    
    900Benefits paid
    
    
    (715
    )
    
    
    (1,169
    )Other
    
    
    (139
    )
    
    
    (183
    )Fair market value at end of year
    
    $
    11,548
    
    
    $
    14,563
   Fiscal Year
    
    Amount2009
    
    
    7602010
    
    
    7642011
    
    
    7622012
    
    
    8182013
    
    
    8682014  2019
    
    
    5,211
  Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Deferred income tax asset  long term
    
    
    
    
    
    $
    884Other non-current liabilities
    
    $
    (4,793
    )
    
    
    (1,744
    )Total
    
    $
    (4,793
    )
    
    $
    (860
    )
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Interest cost
    
    $
    935
    
    
    $
    907
    
    
    $
    861Expected return on plan assets
    
    
    (1,125
    )
    
    
    (1,212
    )
    
    
    (1,077
    )Amortization of transition (asset) obligation
    
    
    (38
    )
    
    
    (38
    )
    
    
    (38
    )Amortization of net loss
    
    
    442
    
    
    
    244
    
    
    
    290Net periodic benefit cost
    
    $
    214
    
    
    $
    (99
    )
    
    $
    36
  Remaining unrecognized benefit obligation existing at transition
    
    
    (37
    )Unrecognized net loss
    
    
    570Total
    
    
    533
 F-32




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##### Table of Contents



Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Discount rate
    
    
    6.3
    %
    
    
    6.0
    %Expected long-term rate of return
    
    
    7.0
    %
    
    
    8.0
    %
  Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Equity securities
    
    
    52.4
    %
    
    
    55.0
    %Fixed securities
    
    
    47.1
    %
    
    
    44.4
    %Other
    
    
    0.5
    %
    
    
    0.6
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
 11. OTHER BENEFIT PLANS
  12. WARRANTS
 VCHI Acquisition Co. Warrants
   Term Loan Warrants and Conversion Warrants
  F-33




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##### Table of Contents



13. COMMITMENTS AND CONTINGENCIES
  Guarantees
    Contractual Obligations
  F-34




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##### Table of Contents



14. INCOME TAXES
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Current:Federal
    
    $
    16,178
    
    
    $
    30,259
    
    
    $
    32,750State and local
    
    
    (1,231
    )
    
    
    6,528
    
    
    
    7,041Total current tax expense
    
    
    14,947
    
    
    
    36,787
    
    
    
    39,791Deferred:Federal
    
    
    3,779
    
    
    
    33,133
    
    
    
    (10,508
    )State and local
    
    
    (1,840
    )
    
    
    2,483
    
    
    
    (1,196
    )Total deferred tax expense (benefit)
    
    
    1,939
    
    
    
    35,616
    
    
    
    (11,704
    )Income tax expense
    
    $
    16,886
    
    
    $
    72,403
    
    
    $
    28,087
  Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007Income tax expense (benefit) at federal statutory rate of 35%
    
    $
    43,978
    
    
    $
    116,987
    
    
    $
    (24,719
    )Warrant liability marked to market
    
    
    (12,572
    )
    
    
    (54,058
    )
    
    
    43,685Jobs credit
    
    
    (198
    )
    
    
    (232
    )
    
    
    (164
    )State and local taxes, net
    
    
    273
    
    
    
    7,461
    
    
    
    2,958Tax exempt interest
    
    
    (550
    )
    
    
    (1,476
    )
    
    
    (498
    )Valuation allowance
    
    
    (16,034
    )
    
    
    (780
    )Fin 48 reserve
    
    
    56
    
    
    
    
    
    
    
    2,112Provision to return adjustments
    
    
    (2,359
    )
    
    
    183
    
    
    
    (2,443
    )Change in subsidiary basis
    
    
    3,644
    
    
    
    4,013
    
    
    
    6,025Other
    
    
    648
    
    
    
    305
    
    
    
    1,131Income tax expense
    
    $
    16,886
    
    
    $
    72,403
    
    
    $
    28,087
 F-35




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##### Table of Contents



Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Deferred tax assets:Basis differences in inventory
    
    $
    4,074
    
    
    $
    3,321Construction and tenant allowances
    
    
    2,335
    
    
    
    1,645Stock compensation
    
    
    6,417
    
    
    
    3,725State net operating loss & credits
    
    
    18,883
    
    
    
    20,639Federal net operating loss
    
    
    81,467
    
    
    
    87,262Federal tax credit
    
    
    14,886
    
    
    
    13,888Benefit from unrecognized tax position
    
    
    794
    
    
    
    2,199Guarantees  Value City
    
    
    5,131
    
    
    
    10,371Workers compensation
    
    
    1,390
    
    
    
    874Accrued expenses
    
    
    4,284
    
    
    
    3,356Accrued rent
    
    
    13,157
    
    
    
    11,846Other
    
    
    3,616
    
    
    
    2,466Total deferred tax assets
    
    
    156,434
    
    
    
    161,592Less: Valuation allowance
    
    
    (50,721
    )
    
    
    (73,353
    )105,713
    
    
    
    88,239Deferred tax liabilities:Basis in subsidiary
    
    
    (80,137
    )
    
    
    (76,493
    )PIES
    
    
    (23,298
    )
    
    
    (9,072
    )Basis differences in property and equipment
    
    
    (4,007
    )
    
    
    (759
    )Prepaid expenses
    
    
    (4,773
    )
    
    
    (4,399
    )Other
    
    
    (256
    )
    
    
    (250
    )Total deferred tax liabilities
    
    
    (112,471
    )
    
    
    (90,973
    )Total net
    
    $
    (6,758
    )
    
    $
    (2,734
    )
  Fiscal Year EndedJanuary 31,
    
    February 2,2009
    
    2008Current deferred tax asset
    
    $
    22,243
    
    
    $
    20,421Non current deferred tax asset
    
    
    805Non current deferred tax liability
    
    
    (29,806
    )
    
    
    (23,155
    )Net deferred tax liability
    
    $
    (6,758
    )
    
    $
    (2,734
    )
    F-36




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##### Table of Contents



Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 January 31,
    
    February 2,2009
    
    2008Beginning Balance
    
    $
    3,028
    
    
    $
    2,004(Decreases)  Tax Positions taken in the prior period
    
    
    (1,760
    )
    
    
    (1,123
    )Increases  Tax positions taken in the current period
    
    
    9
    
    
    
    2,147Ending Balance
    
    $
    1,277
    
    
    $
    3,028
  15. SEGMENT REPORTING
    Category
    
    Fiscal 2008
    
    Fiscal 2007
    
    Fiscal 2006Womens
    
    
    66
    %
    
    
    65
    %
    
    
    65
    %Mens
    
    
    15
    %
    
    
    16
    %
    
    
    16
    %Athletic
    
    
    14
    %
    
    
    14
    %
    
    
    14
    %
 F-37




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##### Table of Contents



TotalIntersegment
    
    ContinuingDSW
    
    Corporate
    
    Eliminations
    
    OperationsAs of and for the year ended
January 31, 2009Net sales
    
    $
    1,462,944
    
    
    
    
    
    
    
    
    
    
    $
    1,462,944Operating profit
    
    
    42,813
    
    
    $
    85,235
    
    
    
    
    
    
    
    128,048Depreciation and amortization
    
    
    36,336
    
    
    
    2,130
    
    
    
    
    
    
    
    38,466Interest expense
    
    
    794
    
    
    
    12,809
    
    
    
    
    
    
    
    13,603Interest income
    
    
    3,400
    
    
    
    7,869
    
    
    
    
    
    
    
    11,269Income tax expense
    
    
    (17,383
    )
    
    
    497
    
    
    
    
    
    
    
    (16,886
    )Capital expenditures
    
    
    80,974
    
    
    
    20
    
    
    
    (2,336
    )
    
    
    78,658Total assets
    
    
    719,615
    
    
    
    128,676
    
    
    
    
    
    
    
    848,291
 TotalIntersegment
    
    ContinuingDSW
    
    Corporate
    
    Eliminations
    
    OperationsAs of and for the year ended
February 2, 2008Net sales
    
    $
    1,405,615
    
    
    
    
    
    
    
    
    
    
    $
    1,405,615Operating profit
    
    
    81,321
    
    
    $
    248,193
    
    
    
    
    
    
    
    329,514Depreciation and amortization
    
    
    25,055
    
    
    
    3,243
    
    
    
    
    
    
    
    28,298Interest expense
    
    
    1,178
    
    
    
    12,718
    
    
    
    
    
    
    
    13,896Interest income
    
    
    7,148
    
    
    
    11,483
    
    
    
    
    
    
    
    18,631Income tax expense
    
    
    (33,516
    )
    
    
    (38,887
    )
    
    
    
    
    
    
    (72,403
    )Capital expenditures
    
    
    102,451
    
    
    
    (715
    )
    
    
    
    
    
    
    101,736Total assets
    
    
    693,882
    
    
    
    90,672
    
    
    
    
    
    
    
    784,554
 TotalIntersegment
    
    ContinuingDSW
    
    Corporate
    
    Eliminations
    
    OperationsFor the year ended February 3, 2007Net sales
    
    $
    1,279,060
    
    
    
    
    
    
    
    
    
    
    $
    1,279,060Operating profit (loss)
    
    
    100,714
    
    
    $
    (175,955
    )
    
    
    
    
    
    
    (75,241
    )Depreciation and amortization
    
    
    20,686
    
    
    
    3,104
    
    
    
    
    
    
    
    23,790Interest expense
    
    
    614
    
    
    
    7,873
    
    
    
    
    
    
    
    8,487Interest income
    
    
    7,527
    
    
    
    5,574
    
    
    
    
    
    
    
    13,101Income tax (expense) benefit
    
    
    (42,164
    )
    
    
    14,077
    
    
    
    
    
    
    
    (28,087
    )Capital expenditures
    
    
    42,407
    
    
    
    (317
    )
    
    
    
    
    
    
    42,090
 F-38




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##### Table of Contents



16. QUARTERLY FINANCIAL DATA (UNAUDITED)
  Year Ended January 31, 2009
 Thirteen Weeks EndedMay 3,
    
    August 2,
    
    November
    
    January 31,2008
    
    2008
    
    1, 2008
    
    2009(in thousands except per share data)Net sales
    
    $
    366,264
    
    
    $
    357,175
    
    
    $
    391,355
    
    
    $
    348,150Cost of sales
    
    
    (211,098
    )
    
    
    (198,515
    )
    
    
    (218,946
    )
    
    
    (213,034
    )Gross profit
    
    
    155,166
    
    
    
    158,660
    
    
    
    172,409
    
    
    
    135,116Selling, general and administrative expenses
    
    
    (139,160
    )
    
    
    (140,981
    )
    
    
    (151,492
    )
    
    
    (146,905
    )Change in fair value of derivative instruments
    
    
    21,944
    
    
    
    9,463
    
    
    
    (669
    )
    
    
    24,488Change in fair value of derivative instruments  related party
    
    
    15,224
    
    
    
    7,270
    
    
    
    8,527
    
    
    
    (1,012
    )Operating profit
    
    
    53,174
    
    
    
    34,412
    
    
    
    28,775
    
    
    
    11,687Interest expense
    
    
    (3,541
    )
    
    
    (3,649
    )
    
    
    (3,241
    )
    
    
    (3,172
    )Interest income
    
    
    2,898
    
    
    
    2,676
    
    
    
    2,894
    
    
    
    2,801Interest expense, net
    
    
    (643
    )
    
    
    (973
    )
    
    
    (347
    )
    
    
    (371
    )Non-operating income (expense)
    
    
    
    
    
    
    
    
    
    
    1,486
    
    
    
    (1,134
    )Income from continuing operations before income taxes and
minority interest
    
    
    52,531
    
    
    
    33,439
    
    
    
    29,914
    
    
    
    10,182Income tax (expense) benefit
    
    
    (6,622
    )
    
    
    (7,617
    )
    
    
    (10,410
    )
    
    
    7,763Income from continuing operations before minority interest
    
    
    45,909
    
    
    
    25,822
    
    
    
    19,504
    
    
    
    17,945Minority interest
    
    
    (3,806
    )
    
    
    (3,954
    )
    
    
    (4,988
    )
    
    
    2,788Income from continuing operations
    
    
    42,103
    
    
    
    21,868
    
    
    
    14,516
    
    
    
    20,733(Loss) income from discontinued operations, net of tax  Value
City
    
    
    (3,621
    )
    
    
    10,494
    
    
    
    2,035
    
    
    
    4,315Loss from discontinued operations, net of tax  Filenes
Basement
    
    
    (9,331
    )
    
    
    (14,628
    )
    
    
    (6,562
    )
    
    
    (31,081
    )Net income (loss)
    
    $
    29,151
    
    
    $
    17,734
    
    
    $
    9,989
    
    
    $
    (6,033
    )Earnings (loss) per share(1):Basic earnings per share from continuing operations
    
    $
    0.87
    
    
    $
    0.45
    
    
    $
    0.30
    
    
    $
    0.43Diluted earnings per share from continuing operations
    
    $
    0.82
    
    
    $
    0.45
    
    
    $
    0.30
    
    
    $
    0.43Basic loss per share from discontinued operations
    
    $
    (0.27
    )
    
    $
    (0.08
    )
    
    $
    (0.09
    )
    
    $
    (0.55
    )Diluted loss per share from discontinued operations
    
    $
    (0.25
    )
    
    $
    (0.08
    )
    
    $
    (0.09
    )
    
    $
    (0.55
    )Basic earnings (loss) per share
    
    $
    0.60
    
    
    $
    0.36
    
    
    $
    0.21
    
    
    $
    (0.12
    )Diluted earnings (loss) per share
    
    $
    0.56
    
    
    $
    0.36
    
    
    $
    0.20
    
    
    $
    (0.12
    )
 
 (1)
    
    Earnings (loss) per share calculations for each quarter are based on the
applicable weighted average shares outstanding for each period and may not necessarily
be equal to the full year per share amount. F-39




---



##### Table of Contents



Year Ended February 2, 2008
 Thirteen Weeks EndedMay 5,
    
    August 4,
    
    November
    
    February 2,2007
    
    2007
    
    3, 2007
    
    2008(in thousands except per share data)Net sales
    
    $
    356,997
    
    
    $
    348,718
    
    
    $
    367,380
    
    
    $
    332,520Cost of sales
    
    
    (196,721
    )
    
    
    (215,392
    )
    
    
    (205,794
    )
    
    
    (203,940
    )Gross profit
    
    
    160,276
    
    
    
    133,326
    
    
    
    161,586
    
    
    
    128,580Selling, general and administrative expenses
    
    
    (123,058
    )
    
    
    (125,000
    )
    
    
    (126,781
    )
    
    
    (127,608
    )Change in fair value of derivative instruments
    
    
    14,596
    
    
    
    26,953
    
    
    
    43,497
    
    
    
    11,230Change in fair value of derivative instruments  related party
    
    
    (2,047
    )
    
    
    97,831
    
    
    
    47,850
    
    
    
    8,283Operating profit
    
    
    49,767
    
    
    
    133,110
    
    
    
    126,152
    
    
    
    20,485Interest expense
    
    
    (3,362
    )
    
    
    (3,296
    )
    
    
    (3,305
    )
    
    
    (3,933
    )Interest income
    
    
    4,655
    
    
    
    4,967
    
    
    
    4,600
    
    
    
    4,409Interest income, net
    
    
    1,293
    
    
    
    1,671
    
    
    
    1,295
    
    
    
    476Income from continuing operations before income taxes and
minority interest
    
    
    51,060
    
    
    
    134,781
    
    
    
    127,447
    
    
    
    20,961Income tax expense
    
    
    (22,661
    )
    
    
    (13,995
    )
    
    
    (32,278
    )
    
    
    (3,469
    )Income from continuing operations before minority interest
    
    
    28,399
    
    
    
    120,786
    
    
    
    95,169
    
    
    
    17,492Minority interest
    
    
    (8,776
    )
    
    
    (2,411
    )
    
    
    (8,295
    )
    
    
    (397
    )Income from continuing operations
    
    
    19,623
    
    
    
    118,375
    
    
    
    86,874
    
    
    
    17,095Loss from discontinued operations, net of tax  Value City
    
    
    (10,362
    )
    
    
    (9,343
    )
    
    
    (14,211
    )
    
    
    (116,746
    )Loss from discontinued operations, net of tax  Filenes
Basement
    
    
    (6,521
    )
    
    
    (2,814
    )
    
    
    (4,441
    )
    
    
    (26,087
    )Net income (loss)
    
    $
    2,740
    
    
    $
    106,218
    
    
    $
    68,222
    
    
    $
    (125,738
    )Earnings (loss) per share(1):Basic earnings per share from continuing operations
    
    $
    0.42
    
    
    $
    2.46
    
    
    $
    1.79
    
    
    $
    0.35Diluted earnings per share from continuing operations
    
    $
    0.33
    
    
    $
    2.01
    
    
    $
    1.53
    
    
    $
    0.33Basic loss per share from discontinued operations
    
    $
    (0.36
    )
    
    $
    (0.25
    )
    
    $
    (0.38
    )
    
    $
    (2.94
    )Diluted loss per share from discontinued operations
    
    $
    (0.28
    )
    
    $
    (0.21
    )
    
    $
    (0.33
    )
    
    $
    (2.73
    )Basic earnings (loss) per share
    
    $
    0.06
    
    
    $
    2.21
    
    
    $
    1.40
    
    
    $
    (2.59
    )Diluted earnings (loss) per share
    
    $
    0.05
    
    
    $
    1.81
    
    
    $
    1.20
    
    
    $
    (2.40
    )
 
 (1)
    
    Earnings (loss) per share calculations for each quarter are based on the
applicable weighted average shares outstanding for each period and may not necessarily
be equal to the full year per share amount. F-40




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##### Table of Contents



17. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 Fiscal Year EndedJanuary 31,
    
    February 2,
    
    February 3,2009
    
    2008
    
    2007(in thousands)Cash paid during the period for:Interest to non related parties
    
    $
    9,358
    
    
    $
    9,523
    
    
    $
    3,148Income taxes
    
    $
    12,804
    
    
    $
    35,401
    
    
    $
    40,498Noncash investing and operating activities:(Decrease) increase in accounts payable due to asset purchases
    
    $
    (4,271
    )
    
    $
    3,384
    
    
    $
    (746
    )Additional paid in capital transferred from warrant liability
for warrant exercises
    
    
    
    
    
    $
    19,612
    
    
    $
    78,817Reclassification of SARs from noncurrent liability to equity
    
    
    
    
    
    $
    1,934Issuance of VCHI Warrants
    
    
    
    
    
    $
    124
 18. SUBSEQUENT EVENTS
     F-41




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##### Table of Contents



INDEX TO EXHIBITS
Exhibits marked with an asterisk (*) are filed herewith.
 ExhibitNo.
    
    Description2.1
    
    Agreement and Plan of Merger among Value City Department Stores, Inc., Retail Ventures, Inc. (the Company)
and Value City Merger Sub, Inc., effective as of October 8, 2003. Incorporated by reference to Exhibit 2 to
Form 8-K (file no. 1-10767) filed on October 8, 2003.2.2
    
    Purchase Agreement, dated as of January 23, 2008, by and between Retail Ventures, Inc. and VCHI Acquisition
Co. Incorporated herein by reference to Exhibit 2.1 to Form 8-K (file no 1-10767) filed January 24, 2008.2.3
    
    Purchase Agreement, dated as of April 21, 2009 by and between Retail Ventures, Inc. and FB II Acquisition
Corp. Incorporated herein by reference to Exhibit 2.1 to Form 8-K (file no 1-10767) filed April 27, 2009.3.1
    
    Amended Articles of Incorporation of the Company. Incorporated by reference to Exhibit 3(a) to Form 8-K (file
No. 1-10767) filed on October 8, 2003.3.2
    
    Amended Code of Regulations of the Company. Incorporated by reference to Exhibit 3(b) to Form 8-K (file No.
1-10767) filed on October 8, 2003.4.1
    
    Amended Common Stock Purchase Warrant issued by Retail Ventures, Inc. to Cerberus Partners, L.P. Incorporated
by reference to Exhibit 4.1 to Form 8-K (file no. 1-10767) filed October 19, 2005.4.2
    
    Amended Common Stock Purchase Warrant issued by Retail Ventures, Inc. to Schottenstein Stores Corporation.
Incorporated by reference to Exhibit 4.2 to Form 8-K (file no. 1-10767) filed October 19, 2005.4.3
    
    Form of Term Loan Warrant issued by Retail Ventures, Inc. to Millennium Partners, L.P. Incorporated by
reference to Exhibit 4.1 to Form 10-Q (file no. 1-10767) filed December 8, 2005.4.4
    
    Form of Conversion Warrant issued by Retail Ventures, Inc. issued to Cerberus Partners, L.P. and
Schottenstein Stores Corporation. Incorporated by reference to Exhibit 4.1 to Form 8-K (file no. 1-10767)
filed July 11, 2005.4.5
    
    Exchange Agreement, dated July 5, 2005, between Retail Ventures, Inc. and DSW Inc. Incorporated by reference
to Exhibit 10.4 to Form 8-K (file no. 1-10767) filed July 11, 2005.4.6
    
    Second Amended and Restated Registration Rights Agreement, dated July 5, 2005, among Retail Ventures, Inc.,
Cerberus Partners, L.P., Schottenstein Stores Corporation and Back Bay Capital Funding LLC. Incorporated by
reference to Exhibit 4.2 to Form 8-K (file no. 1-10767) filed July 11, 2005.4.7
    
    Specimen of Common Share Certificate. Incorporated by reference to Exhibit 4.7 to Form 10-K (file no.
1-10767) filed April 13, 2006.4.8
    
    Indenture, dated as of August 16, 2006, by and between Retail Ventures, Inc. and HSBC Bank USA, National
Association, as indenture trustee (Form of 6.625% Mandatorily Exchangeable Notes Due September 15, 2011 filed
as Exhibit A thereto). Incorporated by reference to Exhibit 4.1 to Form 8-K (file no. 001-10767) filed on
August 22, 2006.4.9
    
    Collateral Agreement, dated as of August 16, 2006, by and between Retail Ventures, Inc., as pledgor, and HSBC
Bank USA, National Association, as collateral agent, indenture trustee and securities intermediary.
Incorporated by reference to Exhibit 4.2 to Form 8-K (file no. 001-10767) filed on August 22, 2006.4.10
    
    Form of Exchange Request by Retail Ventures, Inc. to DSW Inc. Incorporated by reference to Exhibit 4.5 to
Registration Statement on Form S-3/A (file no. 333-134225) filed on July 17, 2006.4.11
    
    Pledge Agreement, dated as of August 16, 2006, made by Retail Ventures, Inc. with and in favor of Cerberus
Partners, L.P. Incorporated by reference to Exhibit 10.4 to Form 8-K (file no. 001-10767) filed on August
22, 2006.4.12
    
    Pledge Agreement, dated as of August 16, 2006, made by Retail Ventures, Inc. with and in favor of
Schottenstein Stores Corporation. Incorporated by reference to Exhibit 10.5 to Form 8-K (file no. 001-10767)
filed on August 22, 2006.4.13
    
    Common Stock Purchase Warrant, dated January 23, 2008, issued by Retail Ventures, Inc. to VCHI Acquisition
Co. Incorporated by reference to Exhibit 4.13 to Form 10-K (file no. 1-10767) filed April 25, 2008.
 E-1




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##### Table of Contents



ExhibitNo.
    
    Description10.1
    
    Corporate Services Agreement, dated June 12, 2002, between the Company and SSC. Incorporated by reference to
Exhibit 10.6 to Form 10-Q (file no. 1-10767) filed June 18, 2002.10.1.1
    
    Amendment to Corporate Services Agreement, dated July 5, 2005, among Schottenstein Stores Corporation, Retail
Ventures, Inc. and Schottenstein Management Company, together with Side Letter Agreement, dated July 5, 2005,
among DSW Inc., Schottenstein Stores Corporation, Retail Ventures, Inc. and Schottenstein Management Company.
Incorporated by reference to Exhibit 10.5 to Form 8-K (file no. 1-10767) filed July 11, 2005.10.3
    
    Master Separation Agreement, dated July 5, 2005, between Retail Ventures, Inc. and DSW Inc. Incorporated by
reference to Exhibit 10.1 to Form 8-K (file no. 1-10767) filed July 11, 2005.10.4
    
    Amended and Restated Shared Services Agreement, dated as of October 29, 2006, between Retail Ventures, Inc.
and DSW Inc. Incorporated by reference to Exhibit 10.8 to form 10-Q (file no. 1-10767) filed December 6.
2006.10.4.1
    
    Amendment No. 1 to Amended and Restated Shared Services Agreement between DSW, Inc. and Retail Ventures,
Inc., dated as of March 17, 2008. Incorporated by reference to Exhibit 10.2 to Form 8-K (file no. 1-10767)
filed August 28, 2008.10.5
    
    Tax Separation Agreement, dated July 5, 2005, among Retail Ventures, Inc. and its affiliates and DSW Inc. and
its affiliates. Incorporated by reference to Exhibit 10.3 to Form 8-K (file no. 1-10767) filed July 11, 2005.10.5.1
    
    Amendment No. 1 to Tax Separation Agreement between DSW Inc. and Retail Ventures, Inc., dated as of March 17,
2008. Incorporated by reference to Exhibit 10.3 to Form 8-K (file no. 1-10767) filed August 28, 2008.10.6
    
    Supply Agreement, effective as of January 30, 2005, between DSW Inc. and Filenes Basement, Inc. Incorporated
by reference to Exhibit 10.6 to Form 8-K (file no. 1-10767) filed July 11, 2005.10.7#
    
    Form of Indemnification Agreement entered into on December 22, 2005 between Retail Ventures, Inc. and each of
its directors and executive officers. Incorporated by reference to Exhibit 10.1 to Form 8-K (file no.
1-10767) filed December 23, 200510.18#
    
    Form of Restricted Stock Agreement between the Company and certain employees. Incorporated by reference to
Exhibit 10.27 to Amendment No. 1 to Form S-1 Registration Statement (file no. 33-47252) filed April 27, 1992.10.32
    
    Industrial Space Lease-Net, dated March 22, 2000, between 4300 East Fifth Avenue, LLC, an affiliate of SSC,
as landlord, and Shonac Corporation, as tenant, re: Building 6, Columbus International Aircenter, Columbus,
OH. Incorporated by reference to Exhibit 10.60 to Form 10-K (file no. 1-10767) filed April 28, 2000.10.33
    
    Lease, dated August 30, 2002, by and between Jubilee Limited Partnership, an affiliate of SSC, and Shonac
Corporation, re: Troy, MI DSW store. Incorporated by reference to Exhibit 10.44 to Form 10-K (file no.
1-10767) filed April 29, 2004.10.33.1
    
    Assignment and Assumption Agreement, dated October 23, 2002, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Troy, MI DSW store. Incorporated by reference to Exhibit 10.29.1 to
Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.34
    
    Lease, dated October 8, 2003, by and between Jubilee Limited Partnership, an affiliate of SSC, and Shonac
Corporation, re: Denton, TX DSW store. Incorporated by reference to Exhibit 10.46 to Form 10-K (file no.
1-10767) filed April 29, 2004.10.34.1
    
    Assignment and Assumption Agreement, dated December 18, 2003 between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Denton, TX DSW store. Incorporated by reference to Exhibit 10.30.1 to
Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.35
    
    Lease, dated October 28, 2003, by and between JLP-RICHMOND LLC, an affiliate of SSC, and Shonac Corporation,
re: Richmond, VA DSW store. Incorporated by reference to Exhibit 10.47 to Form 10-K (file no. 1-10767) filed
April 29, 2004.10.35.1
    
    Assignment and Assumption Agreement, dated December 18, 2003, between Shonac Corporation, as assignor, and
DSW Shoe Warehouse, Inc., as assignee, re: Richmond, VA DSW store. Incorporated by reference to Exhibit
10.31.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.36#
    
    Employment Agreement, dated June 21, 2000, between James A. McGrady and the Company. Incorporated by
reference to Exhibit 10.46 (also listed as Exhibit 10.61) to Form 10-K (file no. 1-10767) filed May 4, 2001.
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##### Table of Contents



ExhibitNo.
    
    Description10.36.1#
    
    Amendment to June 22, 2000 employment agreement between the Company and James A. McGrady effective June 22,
2008. Incorporated by reference to Exhibit 10.1 to Form 8-K (file no. 1-10767) filed July 3, 2008.10.37#
    
    Employment Agreement, dated as of April 29, 2004, between Julia A. Davis and the Company. Incorporated by
reference to Exhibit 10.51 to Form 10-K (file no. 1-10767) filed April 29, 2004.10.42#
    
    Employment Agreement, effective November 1, 2004, between Retail Ventures, Inc. and Heywood Wilansky.
Incorporated by reference to Exhibit 10.1 to Form 8-K/A (file no. 1-10767) filed November 24, 2004.10.42.1#
    
    Amendment to November 1, 2004 employment agreement between the Company and Heywood Wilansky effective
December 9, 2008. Incorporated by reference to Exhibit 10.1 to Form 8-K (file no. 1-10767) filed December
15, 2008.10.43#
    
    Employment Agreement, effective October 10, 2003, between Value City Department Stores, Inc. and Steven E.
Miller. Incorporated by reference to Exhibit 10.43 to Form 10-K (file no. 1-10767) filed April 14, 2005.10.47
    
    Sublease, dated May 2000, by and between SSC, as sublessor, and Shonac Corporation dba DSW Shoe Warehouse, as
sublessee, re: Pittsburgh, PA DSW store. Incorporated by reference to Exhibit 10.48 to Form 10-K (file no.
1-10767) filed April 14, 2005.10.47.1
    
    Assignment and Assumption Agreement, dated January 8, 2001, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: 451 Clariton Boulevard, Pittsburgh, PA DSW store. Incorporated by
reference to Exhibit 10.48.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.48
    
    Lease, dated May 2000, by and between Jubilee-Richmond LLC, an affiliate of SSC, and DSW Shoe Warehouse, Inc.
(as assignee of Shonac Corporation), re: Glen Allen, VA DSW store. Incorporated by reference to Exhibit 10.49
to Form 10-K (file no. 1-10767) filed April 14, 2005.10.49
    
    Lease, dated February 28, 2001, by and between Jubilee-Springdale, LLC, an affiliate of SSC, and Shonac
Corporation dba DSW Shoe Warehouse, re: Springdale, OH DSW store. Incorporated by reference to Exhibit 10.50
to Form 10-K (file no. 1-10767) filed April 14, 2005.10.49.1
    
    Assignment and Assumption Agreement, dated May 11, 2001, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Springdale, OH DSW store. Incorporated by reference to Exhibit 10.50.1
to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.50
    
    Agreement of Lease, dated 1997, between Shoppes of Beavercreek Ltd., an affiliate of SSC, and Shonac
Corporation (assignee of SSC d/b/a Value City Furniture through Assignment of Tenants Leasehold Interest and
Amendment No. 1 to Agreement of Lease, dated February 28, 2001), re: Beavercreek, OH DSW store. Incorporated
by reference to Exhibit 10.51 to Form 10-K (file no. 1-10767) filed April 14, 2005.10.50.1
    
    Assignment and Assumption Agreement, dated May 11, 2001, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Beavercreek, OH DSW store. Incorporated by reference to Exhibit
10.51.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.51
    
    Lease, dated February 28, 2001, by and between JLP-Chesapeake, LLC, an affiliate of SSC, and Shonac
Corporation, re: Chesapeake, VA DSW store. Incorporated by reference to Exhibit 10.52 to Form 10-K (file no.
1-10767) filed April 14, 2005.10.51.1
    
    Assignment and Assumption Agreement, dated May 11, 2001, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Chesapeake, VA DSW store. Incorporated by reference to Exhibit 10.52.1
to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.52
    
    Ground Lease Agreement, dated April 30, 2002, by and between Polaris Mall, LLC, a Delaware limited liability
company, and SSC-Polaris LLC, an affiliate of SSC, as modified by Sublease agreement, dated April 30, 2002,
by and between SSC-Polaris LLC, as sublessor, and DSW Shoe Warehouse, Inc. as sublease (assignee of Shonac
Corporation), re: Columbus, OH (Polaris) DSW store. Incorporated by reference to Exhibit 10.53 to Form 10-K
(file no. 1-10767) filed April 14, 2005.10.52.1
    
    Assignment and Assumption Agreement, dated August 6, 2002, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Columbus, OH (Polaris) DSW store. Incorporated by reference to Exhibit
10.53.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.53
    
    Lease, dated August 30, 2002, by and between JLP-Cary LLC, an affiliate of SSC, and Shonac Corporation, re:Cary, NC DSW store. Incorporated by reference to Exhibit 10.54 to Form 10-K (file no. 1-10767) filed April
14, 2005.10.53.1
    
    Assignment and Assumption Agreement, dated October 23, 2002, between Shonac Corporation, as assignor and DSW
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##### Table of Contents



ExhibitNo.
    
    DescriptionShoe Warehouse, Inc., as assignee, re: Cary, NC DSW store. Incorporated by reference to Exhibit 10.54.1 to
Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.54
    
    Lease, dated August 30, 2002, by and between JLP-Madison LLC, an affiliate of SSC, and Shonac Corporation,
re: Madison, TN DSW store. Incorporated by reference to Exhibit 10.55 to Form 10-K (file no. 1-10767) filed
April 14, 2005.10.54.1
    
    Assignment and Assumption Agreement, dated October 23, 2002, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: Madison, TN DSW store. Incorporated by reference to Exhibit 10.55.1 to
Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.55
    
    Lease, dated July 19, 2000, by and between Jubilee Limited Partnership, an affiliate of SSC, and Value City
Department Stores, Inc., as modified by Lease Modification Agreement, dated November 2, 2000, re: 3704 W.
Dublin-Granville Rd., Columbus, OH DSW/Filenes combo store. Incorporated by reference to Exhibit 10.56 to
Form 10-K (file no. 1-10767) filed April 14, 2005.10.55.1
    
    Assignment and Assumption of Lease Agreement, dated January 22, 2008, between Value City Department Stores
LLC, Retail Ventures, Inc. and Jubilee-Sawmill LLC, an affiliate of SSC, re: 3704 W. Dublin-Granville Rd.,
Columbus, OH DSW/Filenes combo store. Incorporated by reference to Exhibit 10.55.1 to Form 10-K (file no.
1-10767) filed April 25, 2008.10.57
    
    Lease, dated September 24, 2004, by and between K&S Maple Hill Mall, L.P., an affiliate of SSC, and Shonac
Corporation, re: Kalamazoo, MI DSW store. Incorporated by reference to Exhibit 10.58 to Form 10-K (file no.
1-10767) filed April 14, 2005.10.57.1
    
    Assignment and Assumption Agreement, dated February 28, 2005, between Shonac Corporation, as assignor, and
DSW Shoe Warehouse, Inc., as assignee, re: Kalamazoo, MI DSW store. Incorporated by reference to Exhibit
10.58.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.58
    
    Lease, dated November 2004, by and between KSK Scottsdale Mall, L.P., an affiliate of SSC, and Shonac
Corporation, re: South Bend, IN DSW store. Incorporated by reference to Exhibit 10.59 to Form 10-K (file no.
1-10767) filed April 14, 2005.10.58.1
    
    Assignment and Assumption Agreement, dated March 18, 2005, between Shonac Corporation, as assignor, and DSW
Shoe Warehouse, Inc., as assignee, re: South Bend, IN DSW store. Incorporated by reference to Exhibit 10.59.1
to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12, 2005.10.61#
    
    Sample Nonqualified Stock Option Award Agreement issued by the Company pursuant to the 2000 Stock Incentive
Plan. Incorporated by reference to Exhibit 10.62 to Form 10-K (file no. 1-10767) filed April 14, 2005.10.62#
    
    Sample Price Protected Stock Option Award Agreement issued by the Company pursuant to the 2000 Stock
Incentive Plan. Incorporated by reference to Exhibit 10.63 to Form 10-K (file no. 1-10767) filed April 14,
2005.10.63#
    
    Sample Equity Compensation Approval Notice and Agreement issued by the Company to certain employees.
Incorporated by reference to Exhibit 10.64 to Form 10-K (file no. 1-10767) filed April 14, 2005.10.65#
    
    Form of Indemnification Agreement between the Company and its directors and officers. Incorporated by
reference to Exhibit 10(b) to Registration Statement on Form S-8 (file no. 333-117341) filed July 13, 2004.10.68
    
    Agreement of Sublease, dated June 12, 2000, between Jubilee Limited Partnership, an affiliate of SSC, and DSW
Shoe Warehouse, Inc. (assignee of DSW Inc.), re: Baileys Crossroads, VA DSW Store. Incorporated by reference
to Exhibit 10.1 to Form 10-Q (file no. 1-10767) filed June 9, 2005.10.71#
    
    Employment Agreement, effective as of January 29, 2006, by and between Jed L. Norden and the Company.
Incorporated by reference to Exhibit 10.1 to Form 8-K (file no. 1-10767) filed February 2, 2006.10.72
    
    Agreement of Lease, dated April 7, 2006, by and between JLP  Harvard Park, LLC, an affiliate of SSC, as
landlord, and DSW Inc., as tenant, re: Chagrin Highlands, Warrensville, Ohio DSW store. Incorporated by
reference to Exhibit 10.72 to Form 10-K (file no. 1-10767) filed April 13, 2006.10.74#
    
    Summary of Director Compensation. Incorporated by reference to Exhibit 10.74 to Form 10-K (file no. 1-10767)
filed April 13, 2006.10.75
    
    Loan and Security Agreement, between DSW Inc. and DSW Shoe Warehouse, Inc., as the Borrowers, and National
City Business Credit, Inc., as Administrative Agent and Collateral Agent for the Revolving Credit Lenders.
Incorporated by reference to Exhibit 10.11 to DSW Inc.s Form 10-K (file no. 001-32545) filed on April 13,
2006.
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##### Table of Contents



ExhibitNo.
    
    Description10.76
    
    Agreement of Lease, dated April 13, 2006, between JLP  Harvard Park, LLC, an affiliate of SSC, as landlord,
and Filenes Basement, Inc. as tenant, re: Chagrin, OH Filenes Basement store. Incorporated by reference to
Exhibit 10.1 to Form 10-Q (file no. 1-10767) filed June 8, 2006.10.77
    
    Agreement of Lease, dated June 30, 2006, between JLPK  Levittown NY LLC, an affiliate of Schottenstein
Stores Corporation and DSW Inc., re: Levittown, NY DSW store. Incorporated by reference to Exhibit 10.1 to
Form 10-Q (file no. 1-10767) filed December 6, 2006.10.78
    
    Agreement of Lease, dated November 27, 2006, between JLP  Lynnhaven VA LLC, an affiliate of Schottenstein
Stores Corporation and DSW Inc., re: Lynnhaven, Virginia DSW store. Incorporated by reference to Exhibit 10.2
to Form 10-Q (file no. 1-10767) filed December 6, 2006.10.79
    
    Agreement of Lease, dated November 30, 2006, between 4300 Venture 34910 LLC, an affiliate of Schottenstein
Stores Corporation, and DSW Inc., re: Home office. Incorporated by reference to Exhibit 10.3 to Form 10-Q
(file no. 1-10767) filed December 6, 2006.10.80
    
    Agreement of Lease, dated November 30, 2006, between 4300 East Fifth Avenue LLC, an affiliate of
Schottenstein Stores Corporation, and DSW Inc., re: Trailer Parking spaces for home office. Incorporated by
reference to Exhibit 10.4 to Form 10-Q (file no. 1-10767) filed December 6, 2006.10.81
    
    Lease Amendment, dated November 30, 2006 between 4300 Venture 6729 LLC, an affiliate of Schottenstein Stores
Corporation, and DSW Inc., re: warehouse and corporate headquarters. Incorporated by reference to Exhibit
10.5 to Form 10-Q (file no. 1-10767) filed December 6, 2006.10.82
    
    Agreement of Lease, dated June 30, 2006, between JLPK  Levittown NY LLC, an affiliate of Schottenstein
Stores Corporation and Filenes Basement, re: Levittown, NY Filenes Basement store. Incorporated by
reference to Exhibit 10.6 to Form 10-Q (file no. 1-10767) filed December 6, 2006.10.83
    
    IT Transfer and Assignment Agreement dated October 29, 2006. Incorporated by reference to Exhibit 10.7 to
Form 10-Q (file no. 1-10767) filed December 6, 2006.10.84
    
    Agreement of Lease, dated December 15, 2006, between American Signature, Inc., an affiliate of SSC, and DSW
Shoe Warehouse, Inc., re: Langhorne, Pennsylvania DSW store. Incorporated herein by reference to Exhibit
10.84 to Form 10-K (file no. 1-10767) filed April 5, 2007.10.85#
    
    Sample Restricted Stock Unit Award Agreement issued by the Company to certain employees. Incorporated herein
by reference to Exhibit 10.85 to Form 10-K (file no. 1-10767) filed April 5, 2007.10.86#
    
    Sample Stock Appreciation Right Award Agreement issued by the Company to certain employees. Incorporated
herein by reference to Exhibit 10.86 to Form 10-K (file no. 1-10767) filed April 5, 2007.10.87
    
    Agreement of Lease, dated July 9, 2007, between Jubilee Limited Partnership, an affiliate of Schottenstein
Stores Corporation, and Filenes Basement, re: Aventura, FL Filenes Basement store. Incorporated herein by
reference to Exhibit 10.1 to Form 10-Q (file no. 1-10767) filed September 13, 2007.10.88
    
    Second Amended and Restated Senior Loan and Security Agreement, dated as of January 23, 2008, by and among
Filenes Basement, as borrower, the revolving credit lenders party thereto and National City Business Credit,
Inc. as administrative agent and collateral agent. Incorporated herein by reference to Exhibit 10.1 to Form
8-K (file no. 1-10767) filed on January 24, 2008.10.88.1
    
    First Amendment to Second Amended and Restated Loan and Security Agreement entered into by and among Filenes
Basement, Inc., National City Business Credit, Inc., Wells Fargo Retail Finance LLC and Wachovia Capital
Finance Corporation (Central) on September 12, 2008. Incorporated herein by reference to Exhibit 10.1 to
Form 8-K (file no. 1-10767) filed September 18, 2008.10.88.2
    
    Second Amendment to Second Amended and Restated Loan and Security Agreement entered into by and among
Filenes Basement, Inc., National City Business Credit, Inc., Wells Fargo Retail Finance, LLC and Wachovia
Capital Finance Corporation (Central) on February 11, 2009. Incorporated herein by reference to Exhibit 10.1
to Form 8-K (file no. 1-10767) filed February 13, 2009.10.89
    
    Agreement to Acquire Leases and Lease Properties, dated October 3, 2007. Incorporated herein by reference to
Exhibit 10.1 to Form 8-K (file no. 1-10767) filed October 4, 2007.
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##### Table of Contents



ExhibitNo.
    
    Description10.89.1
    
    First Amendment to Agreement to Acquire Leases and Lease Properties, dated effective as of February 15, 2008.
Incorporated herein by reference to Exhibit 10.1 to Form 8-K (file no. 1-10767) filed January 28, 2008.10.90#
    
    2007 Retail Ventures, Inc. Cash Incentive Compensation Plan. Incorporated by reference to Exhibit 10.90 to
Form 10-K (file no. 1-10767) filed April 25, 2008.10.91
    
    Supply Agreement (Combo Stores), effective as of January 30, 2005, between DSW Inc. and Filenes Basement
Inc. Incorporated by reference to Exhibit 10.91 to Form 10-K (file no. 1-10767) filed April 25, 2008.10.93
    
    Last Out Participation Agreement entered into by and among National City Business Credit, Inc. and Retail
Ventures, Inc. on February 11, 2009. Incorporated herein by reference to Exhibit 10.2 to Form 8-K (file no.
1-10767) filed February 13, 2009.10.94#*
    
    Second Amended and Restated Retail Ventures, Inc. 1991 Stock Option Plan.10.95#*
    
    Retail Ventures, Inc. Second Amended and Restated 2000 Stock Incentive Plan (the 2000 Stock Incentive Plan).10.96#*
    
    Second Amended and Restated Retail Ventures, Inc. Non-Employee Director Stock Option Plan.10.97*
    
    Second Amended and Restated Guaranty, dated as of January 23, 2008, by and among Retail Ventures, Inc.,
Retail Ventures Services, Inc., Retail Ventures Licensing, Inc. and Retail Ventures Imports, Inc., as
guarantors, the revolving credit lenders party thereto and National City Business Credit, Inc., as
administrative and collateral agent.10.98
    
    Consent and Ratification Agreement, dated as of April 21, 2009, by and among Filenes Basement, Inc. as
borrower, Retail Ventures, Inc., FB II Acquisition Corp. as purchaser, the revolving credit lenders party
thereto and National City Business Credit, Inc., as administrative and collateral agent. Incorporated herein
by reference to Exhibit 10.1 to Form 8-K (file no 1-10767) filed April 27, 2009.10.99*
    
    Sub-license Agreement between Retail Ventures Licensing, Inc. and Filenes Basement, Inc., effective January
23, 2008.12*
    
    Ratio of Earnings to Fixed Charges.21*
    
    List of Subsidiaries.23*
    
    Consent of Independent Registered Public Accounting Firm.24*
    
    Power of Attorney.31.1*
    
    Rule 13a-14(a)/15d-14(a) Certification  Principal Executive Officer.31.2*
    
    Rule 13a-14(a)/15d-14(a) Certification  Principal Financial Officer.32.1*
    
    Section 1350 Certification  Principal Executive Officer.32.2*
    
    Section 1350 Certification  Principal Financial Officer.
 
 *
    
    Filed herewith.#
    
    Management contract or compensatory plan or arrangement. E-6