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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 February 2, 2008
 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
    
    (I.R.S. Employer Identification No.)Organization)
 3241 Westerville Road, Columbus, Ohio
    
    43224(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
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 Item No.
    
    
    
    PagePART I1.
    
    Business
    
    
    51.A
    
    Risk Factors
    
    
    131.B
    
    Unresolved Staff Comments
    
    
    262.
    
    Properties
    
    
    273.
    
    Legal Proceedings
    
    
    284.
    
    Submission of Matters to a Vote of Security Holders
    
    
    28PART II5.
    
    Market for the Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
    
    
    296.
    
    Selected Financial Data
    
    
    317.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    327A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    478.
    
    Financial Statements and Supplementary Data
    
    
    489.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    489A.
    
    Controls and Procedures
    
    
    489B.
    
    Other Information
    
    
    49PART III10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    4911.
    
    Executive Compensation
    
    
    4912.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Shareholders Matters
    
    
    4913.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    4914.
    
    Principal Accountant Fees and Services
    
    
    49PART IV15.
    
    Exhibits, Financial Statement Schedules
    
    
    51SIGNATURES
    
    
    
    
    52EX-4.13EX-10.2EX-10.55.1EX-10.90EX-10.91EX-10.92EX-12EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1EX-32.2
  2




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TABLE OF CONTENTS TO FINANCIAL STATEMENTS AND SCHEDULES
 Report of Independent Registered Public Accounting Firm
    
    F-1Consolidated Balance Sheets
    
    F-2Consolidated Statements of Operations
    
    F-4Consolidated Statements of Shareholders Equity
    
    F-5Consolidated Statements of Cash Flows
    
    F-7Notes to Consolidated Financial Statements
    
    F-8SCHEDULESI- Condensed Financial Information of Registrant
    
    S-1II-Valuation and Qualifying Accounts
    
    S-2Index to Exhibits
    
    E-1
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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
  
    
    our success in opening new stores and operating stores on a timely and profitable
basis;
    
    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;
    
    impact of the disposition 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 deciding to discontinue operations or otherwise not pay its
creditors;
    
    disruption of our distribution operations;
    
    our dependence on DSW for key services;
    
    DSWs success in the development and launch of a DSW e-commerce business;
    
    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 risks related to our investments;
    
    risks inherent to international trade with countries that are major manufacturers of
apparel and footwear; and
    
    security risks related to the electronic processing and transmission of confidential
customer information.
  4




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ITEM 1. BUSINESS.
 History of Our Business
      SM
  5




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General
  DSW.
 Filenes Basement.
 Corporate.
  DSW
   Merchandising
 Selection.
  6




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Value.
  Convenience.
 Advertising and Promotion
   Stores
 Store Location, Design and Operations.
  Expansion.
  7




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Distribution
  Leased Departments and Supply Agreements
   Segment Seasonality
  Service Marks, Trademarks and Tradenames
   FILENES BASEMENT
  8




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Merchandising
 Designer and Famous Brand Merchandise.
 Value Pricing.
  Advertising and Promotion
     9




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Stores
 Store Location, Design and Operations.
     Expansion.
  Distribution
   10




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License Agreements and Leased Departments
    Segment Seasonality
  Service Marks, Trademarks and Tradenames
 ,
 MANAGEMENT INFORMATION AND CONTROL SYSTEMS
 Retail Ventures .
  DSW.
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Filenes Basement.
 Associates
   Competition
    Available Information
  12




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ITEM 1A. RISK FACTORS.
  We may be unable to open all the DSW and Filenes Basement stores contemplated by our growth
strategy on a timely basis, and new stores we open 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 our business, financial condition, cash flow and results of operations.
  
    
    identify suitable markets and sites for new store locations;
    
    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 cash flows from
operations to fund growth;
    
    successfully open new DSW and Filenes Basement stores in regions of the United States in
which we currently have few or no stores;
    
    open new stores at costs not significantly greater than those anticipated;
    
    control the costs of other capital investments associated with store openings, including,
for example, those related to the expansion of distribution facilities;
    
    hire, train and retain qualified managers and store personnel; and
    
    successfully integrate new stores into our existing infrastructure, operations and
management and distribution systems or adapt such infrastructure, operations and systems to
accommodate our growth.
   We intend to open at least 30 new DSW stores per year from fiscal 2008 to 2010, which could strain
our resources and have a material adverse effect on our business and financial performance.
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The temporary cessation of operations at the Downtown Crossing Boston Filenes Basement store could
lead to reduced sales when that location resumes operations.
  DSW plans to launch an e-commerce business 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.
  We rely on our good relationships with vendors and their factors which provide vendor financing to
purchase brand name and designer merchandise at favorable prices. If these relationships were to
be impaired, we may not be able to obtain a sufficient selection of merchandise at attractive
prices, and we may not be able to respond promptly to changing fashion trends, either of which
could have a material adverse effect on our competitive position, business and financial
performance.
   We may be unable to anticipate and respond to fashion trends and consumer preferences in the
markets in which we operate, which could materially adversely affect our business, financial
condition, cash flow and results of operations.
  
    
    variations in local economic conditions, which could affect our customers discretionary
spending;
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
    
    unanticipated fashion trends;
    
    our success in developing and maintaining vendor relationships that provide us access to
in-season merchandise at attractive prices;
    
    our success in distributing merchandise to our stores in an efficient manner; and
    
    changes in weather patterns, which in turn affect consumer preferences.
  Our operations are affected by seasonal variability.
  Our comparable store sales and quarterly financial performance may fluctuate for a variety of
reasons in addition to seasonal factors, which could result in a decline in the price of our common
shares.
  
    
    changes in our merchandising strategy;
    
    timing and concentration of new store openings and related pre-opening and other start-up
costs;
    
    levels of pre-opening expenses associated with new stores;
    
    changes in our merchandise mix;
    
    changes in and regional variations in demographic and population characteristics;
    
    timing of promotional events;
    
    actions by our competitors; and
    
    general United States economic conditions and, in particular, the retail sales
environment.
  Retail Ventures is a holding company and relies on its subsidiaries to make payments on its
indebtedness and meet its obligations.
  15




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If Value City decides to discontinue its operations or otherwise not pay creditors whose
obligations RVI has guaranteed, RVI may become subject to various risks associated with such
refusal to pay creditors, any insolvency or bankruptcy proceedings.
  If Value City defaults on its lease for the premises at 3241 Westerville Rd., RVI and DSW may
become subject to various risks associated with the location of operations on these premises.
  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.
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Filenes Basement and DSWs secured revolving credit facilities could limit operational
flexibility.
 $100 Million Secured Revolving Credit Facility  The Filenes Basement Revolving Loan
  $150 Million Secured Revolving Credit Facility  The DSW Revolving Loan
  Our stock price may fluctuate significantly, which could negatively affect the trading of our
common shares.
  
    
    developments related to DSW and fluctuations in the market price of DSW shares;
    
    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
 17




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
    
    general economic conditions.
 Our failure to retain our existing senior management team and to continue to attract qualified new
personnel could materially adversely affect our business.
  We may be unable to compete favorably in our highly competitive markets.
  SSC and/or its affiliates may compete directly against us.
   A decline in general economic conditions, or the outbreak or escalation of war or terrorist acts,
could lead to reduced consumer demand for our merchandise.
   We rely on foreign sources for our merchandise, and our business is therefore subject to risks
associated with international trade.
  
    
    economic and political instability in countries where these suppliers are located;
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
    
    international hostilities or acts of war or terrorism affecting the United States or
foreign countries from which our merchandise is sourced;
    
    increases in shipping costs;
    
    transportation delays and interruptions, including as a result of increased inspections
of import shipments by domestic authorities;
    
    work stoppages;
    
    adverse fluctuations in currency exchange rates;
    
    laws of the United States 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.
  DSW and Filenes Basement each relies on a primary distribution center. The loss or disruption of
either of these centralized distribution centers could have a material adverse effect on our
business and operations.
     We will require strong cash flows from our DSW and Filene Basement operations to support capital
requirements, operations and debt repayment.
  19




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If we fail to execute our opportunistic buying and inventory management well for Filenes Basement,
our business could be materially adversely affected.
  If we do not attract and retain quality sales, distribution center and other associates in
sufficient numbers as well as experienced buying and management personnel, our performance could be
materially adversely affected.
  If our information systems do not operate and our new technologies are not implemented effectively,
our business could be materially disrupted or our sales or profitability could be reduced.
  We are reliant on our information systems and the loss or disruption of services could affect our
ability to implement our growth strategy and have a material adverse effect on our business.
    We may be unable to quickly monetize our investment in DSW Common Shares.
  20




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The liquidity of DSWs investments could fluctuate based on adverse market conditions.
  
 We face security risks related to our electronic processing and transmission of confidential
customer information. On March 8, 2005, we announced the theft of credit card and other purchase
information related to DSW customers. This security breach could subject us to liability.
     Accounting for Contingencies
 21




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We continue to be dependent on DSW to provide us with key services for our business.
    We are controlled indirectly by Schottenstein Stores Corporation, 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.
  22




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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.
  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.
  23




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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.
  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.
  24




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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.
  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.
  25




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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.
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ITEM 2. PROPERTIES.
  FilenesDSW
    
    Basement
    
    TotalAlabama
    
    
    2
    
    
    
    
    
    
    
    2Arizona
    
    
    5
    
    
    
    
    
    
    
    5California
    
    
    25
    
    
    
    
    
    
    
    25Colorado
    
    
    6
    
    
    
    
    
    
    
    6Connecticut
    
    
    3
    
    
    
    
    
    
    
    3Delaware
    
    
    1
    
    
    
    
    
    
    
    1Florida
    
    
    18
    
    
    
    
    
    
    
    18Georgia
    
    
    9
    
    
    
    1
    
    
    
    10Illinois
    
    
    14
    
    
    
    4
    
    
    
    18Indiana
    
    
    6
    
    
    
    
    
    
    
    6Iowa
    
    
    1
    
    
    
    
    
    
    
    1Kansas
    
    
    2
    
    
    
    
    
    
    
    2Kentucky
    
    
    2
    
    
    
    
    
    
    
    2Louisiana
    
    
    1
    
    
    
    
    
    
    
    1Maine
    
    
    1
    
    
    
    
    
    
    
    1Maryland
    
    
    8
    
    
    
    5
    
    
    
    13Massachusetts
    
    
    11
    
    
    
    8
    
    
    
    19Michigan
    
    
    12
    
    
    
    
    
    
    
    12Minnesota
    
    
    8
    
    
    
    
    
    
    
    8Missouri
    
    
    4
    
    
    
    
    
    
    
    4Nebraska
    
    
    2
    
    
    
    
    
    
    
    2Nevada
    
    
    3
    
    
    
    
    
    
    
    3New Hampshire
    
    
    1
    
    
    
    
    
    
    
    1New Jersey
    
    
    8
    
    
    
    3
    
    
    
    11New York
    
    
    18
    
    
    
    7
    
    
    
    25North Carolina
    
    
    4
    
    
    
    
    
    
    
    4Ohio
    
    
    12
    
    
    
    2
    
    
    
    14Oklahoma
    
    
    2
    
    
    
    
    
    
    
    2Oregon
    
    
    2
    
    
    
    
    
    
    
    2Pennsylvania
    
    
    14
    
    
    
    2
    
    
    
    16Rhode Island
    
    
    1
    
    
    
    
    
    
    
    1Tennessee
    
    
    4
    
    
    
    
    
    
    
    4Texas
    
    
    28
    
    
    
    
    
    
    
    28Utah
    
    
    2
    
    
    
    
    
    
    
    2Virginia
    
    
    12
    
    
    
    1
    
    
    
    13Washington
    
    
    3
    
    
    
    
    
    
    
    3Washington D.C.
    
    
    
    
    
    
    3
    
    
    
    3Wisconsin
    
    
    4
    
    
    
    
    
    
    
    4259
    
    
    
    36
    
    
    
    295
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ITEM 3. LEGAL PROCEEDINGS.
      
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 28




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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 2006:First Quarter
    
    $
    16.60
    
    
    $
    12.35Second Quarter
    
    
    18.00
    
    
    
    14.31Third Quarter
    
    
    17.50
    
    
    
    13.61Fourth Quarter
    
    
    20.47
    
    
    
    15.29Fiscal 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 (through March 31, 2008)
    
    $
    7.46
    
    
    $
    4.59
   PERFORMANCE GRAPH
  
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Company / Index
    
    
    01-Feb-03
    
    
    31-Jan-04
    
    
    29-Jan-05
    
    
    28-Jan-06
    
    
    03-Feb-07
    
    
    02-Feb-08RETAIL VENTURES, INC.
    
    
    $
    100.00
    
    
    
    $
    307.18
    
    
    
    $
    338.97
    
    
    
    $
    652.82
    
    
    
    $
    1,035.38
    
    
    
    $
    364.10RUSSELL 2000
    
    
    $
    100.00
    
    
    
    $
    158.03
    
    
    
    $
    168.69
    
    
    
    $
    203.89
    
    
    
    $
    228.06
    
    
    
    $
    208.33S&P GENERAL MERCHANDISE STORES
    
    
    $
    100.00
    
    
    
    $
    138.16
    
    
    
    $
    164.71
    
    
    
    $
    171.91
    
    
    
    $
    202.22
    
    
    
    $
    183.70
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ITEM 6. SELECTED FINANCIAL DATA.
  For the Fiscal Year Ended (1)February 2,
    
    February 3,
    
    January 28,
    
    January 29,
    
    January 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(dollars in thousands, except per share amounts and net sales per selling square foot)Net sales
    
    $
    1,871,904
    
    
    $
    1,706,533
    
    
    $
    1,533,396
    
    
    $
    1,305,015
    
    
    $
    1,085,531Operating profit before
change in fair value of
derivative instruments
(2)
    
    $
    63,473
    
    
    $
    99,489
    
    
    $
    59,385
    
    
    $
    32,194
    
    
    $
    12,522Change in fair value of derivative
instruments
    
    $
    248,193
    
    
    $
    (175,955
    )
    
    $
    (144,209
    )Operating profit (loss)
    
    $
    311,666
    
    
    $
    (76,466
    )
    
    $
    (84,824
    )
    
    $
    32,194
    
    
    $
    12,522Income (loss) from continuing operations
    
    $
    202,104
    
    
    $
    (128,642
    )
    
    $
    (127,103
    )
    
    $
    18,992
    
    
    $
    (148
    )Loss from discontinued operations
    
    $
    (150,662
    )
    
    $
    (22,271
    )
    
    $
    (56,315
    )
    
    $
    (38,440
    )
    
    $
    (5,071
    )Net income (loss)
    
    $
    51,442
    
    
    $
    (150,913
    )
    
    $
    (183,418
    )
    
    $
    (19,448
    )
    
    $
    (5,219
    )Basic earnings (loss) per share from
continuing operations
    
    $
    4.20
    
    
    $
    (2.85
    )
    
    $
    (3.29
    )
    
    $
    0.56
    
    
    $
    0.00Diluted earnings (loss) per share from
continuing operations
    
    $
    3.56
    
    
    $
    (2.85
    )
    
    $
    (3.29
    )
    
    $
    0.44
    
    
    $
    0.00Basic loss per share from discontinued
operations
    
    $
    (3.13
    )
    
    $
    (0.49
    )
    
    $
    (1.46
    )
    
    $
    (1.13
    )
    
    $
    (0.15
    )Diluted loss per share from discontinued
operations
    
    $
    (2.65
    )
    
    $
    (0.49
    )
    
    $
    (1.46
    )
    
    $
    (0.63
    )
    
    $
    (0.15
    )Basic earnings (loss) per share
    
    $
    1.07
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )
    
    $
    (0.57
    )
    
    $
    (0.15
    )Diluted earnings (loss) per share
    
    $
    0.91
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )
    
    $
    (0.28
    )
    
    $
    (0.15
    )Total assets
    
    $
    951,965
    
    
    $
    1,301,658
    
    
    $
    1,175,154
    
    
    $
    1,270,227
    
    
    $
    1,055,096Working capital
    
    $
    295,862
    
    
    $
    274,439
    
    
    $
    147,746
    
    
    $
    179,767
    
    
    $
    102,541Current ratio
    
    
    1.98
    
    
    
    1.45
    
    
    
    1.25
    
    
    
    1.43
    
    
    
    1.26Long-term obligations
    
    $
    157,793
    
    
    $
    168,053
    
    
    $
    79,678
    
    
    $
    70,001
    
    
    $
    55,000Number of:(3)DSW Stores
    
    
    259
    
    
    
    223
    
    
    
    199
    
    
    
    172
    
    
    
    142Filenes Basement Stores
    
    
    36
    
    
    
    31
    
    
    
    27
    
    
    
    26
    
    
    
    21Net sales per selling sq. ft. (4)
    
    $
    235.34
    
    
    $
    270.31
    
    
    $
    271.57
    
    
    $
    266.28
    
    
    $
    260.88Comparable store sales change (5)
    
    
    0.3
    %
    
    
    2.7
    %
    
    
    4.9
    %
    
    
    4.9
    %
    
    
    4.6
    %
 
 (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 and stores not operated
during the entire fiscal period.(5)
    
    A store or leased department is considered to be comparable if it has been opened 14
months at the beginning of the fiscal year. 31




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  OVERVIEW
      32




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##### Table of Contents



Key Financial Measures
   CRITICAL ACCOUNTING POLICIES
    
    
    Revenue recognition. Revenues from merchandise sales are recognized at the point of sale,
net of returns and exclude sales tax.
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. We
recognized $0.4 million as miscellaneous income from gift card breakage in fiscal 2007. 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
 33




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##### Table of Contents



markdowns. Accordingly, earnings are negatively impacted as merchandise is marked down prior
to sale. Reserves to value inventory at its realizable value were $31.8 million and $25.0
million at the end of fiscal 2007 and 2006, respectively.Inherent in the calculation of inventories are certain significant management judgments and
estimates, including setting the original merchandise retail value (known as markon), markups
of initial prices established, reduction of pricing due to customers perceived value (known
as 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 margins.
    
    Investments. Investments, which include demand notes and auction rate securities, are
classified as available-for-sale securities. These demand notes and auction rate securities
are recorded at cost, which approximates fair value due to their variable interest rates,
which typically reset every 3 to 189 days. All income generated from these investments is
recorded as interest income.DSW records an investment impairment charge at the point it is believed an investment has
experienced a decline in value that 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. The investment is written down to its current market value at the time the
impairment is deemed to have occurred. Any other-than-temporary impairment charge could
materially affect DSWs results of operations.As of February 2, 2008 and February 3, 2007, DSW held $70.0 million and $98.7 million,
respectively, in short-term investments. As of February 2, 2008, DSW held $12.5 million in
long-term investments and held no long-term investments as of February 3, 2007. DSWs
long-term investment balance includes $10.0 million in auction rate securities that failed at
auction after February 2, 2008 and were presented as long-term as it is unknown if DSW will be
able to liquidate these securities within one year.
    
    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 2007, 2006 and 2005, we recorded impairment losses of $5.6 million,
$0.8 million, and $0.5 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. To the extent these future projections or our
strategies change, the conclusion regarding impairment may differ from our current
estimates.
    
    Store closing reserve. During the 2007 fiscal year, the Company recorded charges
associated with the closing of one DSW and two Filenes Basement stores. During the 2006
fiscal year, the Company recorded charges associated with the closing of five DSW stores.
The operating lease at one of the five stores was terminated through the exercise of a lease
kick-out option. During the first quarter of 2006, the Company closed one Filenes Basement
store for which closing costs were accrued during the fourth quarter of fiscal 2005. These
reserves are monitored on at least a quarterly basis for changes in circumstances. The store
closing reserves were $0.4 million and $0.1 million at the end of fiscal 2007 and 2006,
respectively.
    
    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 estimates are calculated utilizing claims development estimates based on
historical experience and other factors. 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 less than $0.1
million. The self-insurance reserves were $3.0 million and $3.6 million at the end of fiscal
2007 and 2006, respectively. The decrease in self-insurance reserves was principally
associated with the decrease in general liability.
 34




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##### Table of Contents




    
    Pension. The obligations and related assets of defined benefit retirement plans are
presented in Note 8 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 both February 3,
2007 and 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 in
which program members receive a discount on future purchases. Upon reaching the
target-earned threshold, members receive certificates for these discounts which must be
redeemed within six months. During the third quarter of fiscal 2006 DSW re-launched its
loyalty program, which included changing the name from Reward Your Style to DSW Rewards,
the points threshold to receive a certificate and the certificate amounts. The changes were
designed to improve customer awareness, customer loyalty and DSWs ability to communicate
with its customers. 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 February 2, 2008 and February 3, 2007 was $6.4 million and
$5.0 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 February 2, 2008 and February 3, 2007, the Company recorded a
benefit of $154.6 million and a charge of $124.8 million, respectively, related to the change
in fair value of warrants. For the fiscal years ended February 2, 2008 and February 3, 2007,
the Company recorded a reduction of expenses of $93.6 million and a charge of $51.1 million,
respectively, related to the change in the fair value of the conversion feature of the PIES.
    
    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 2007, we established
an additional valuation reserve of $84.9 million for deferred tax assets. During fiscal
2006, we established an additional valuation reserve of $2.2 million for deferred tax
assets. During fiscal 2005, we established an additional valuation reserve of $14.4 million
for state net operating loss carry forwards and wrote off $4.0 million of deferred tax
assets no longer deductible as a result of changes in state income tax laws in Ohio.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.
 RESULTS OF OPERATIONS
  35




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##### Table of Contents



Seasonality
  Fiscal Year
   Fifty-two
    
    Fifty-three
    
    Fifty-twoWeeks
    
    Weeks
    
    WeeksEnded
    
    Ended
    
    EndedFebruary 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    (59.9
    )
    
    
    (58.5
    )
    
    
    (59.7
    )Gross profit
    
    
    40.1
    
    
    
    41.5
    
    
    
    40.3Selling, general and administrative expenses
    
    
    (37.1
    )
    
    
    (36.0
    )
    
    
    (36.6
    )Change in fair value of derivative instruments
    
    
    13.3
    
    
    
    (10.3
    )
    
    
    (9.4
    )License fees and other income
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.2Operating profit (loss)
    
    
    16.6
    
    
    
    (4.5
    )
    
    
    (5.5
    )Interest expense
    
    
    (0.7
    )
    
    
    (0.5
    )
    
    
    (0.8
    )Interest income
    
    
    0.6
    
    
    
    0.4
    
    
    
    0.0Interest expense, net
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (0.8
    )Income (loss) from continuing operations
before income taxes and minority interest
    
    
    16.5
    
    
    
    (4.6
    )
    
    
    (6.3
    )Income tax expense
    
    
    (4.6
    )
    
    
    (1.5
    )
    
    
    (1.5
    )Income (loss) from continuing operations
before minority interest
    
    
    11.9
    
    
    
    (6.1
    )
    
    
    (7.8
    )Minority interest
    
    
    (1.1
    )
    
    
    (1.4
    )
    
    
    (0.5
    )Net income (loss) from continuing operations
    
    
    10.8
    %
    
    
    (7.5
    )%
    
    
    (8.3
    )%
 Fiscal Year Ended February 2, 2008 (fiscal 2007) Compared To Fiscal Year Ended February 3, 2007
(fiscal 2006)
 Sales.
 2007
    
    2006DSW
    
    
    (0.8
    )%
    
    
    2.5
    %Filenes Basement
    
    
    3.6
    %
    
    
    3.1
    %Total
    
    
    0.3
    %
    
    
    2.7
    %
 rd
 36




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##### Table of Contents



Gross Profit.
  2007
    
    2006DSW
    
    
    41.5
    %
    
    
    43.1
    %Filenes Basement
    
    
    35.9
    %
    
    
    37.0
    %Total
    
    
    40.1
    %
    
    
    41.5
    %
   Selling, General and Administrative Expenses.
  2007
    
    2006DSW
    
    
    36.1
    %
    
    
    35.4
    %Filenes Basement
    
    
    41.8
    %
    
    
    39.5
    %Total
    
    
    37.1
    %
    
    
    36.0
    %
   37




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##### Table of Contents



Change in Fair Value of Derivatives.
  License fees and other income.
 Operating Profit (Loss).
  2007
    
    2006DSW
    
    
    5.8
    %
    
    
    7.9
    %Filenes Basement
    
    
    (3.8
    )%
    
    
    (0.3
    )%Total
    
    
    16.6
    %
    
    
    (4.5
    )%
  Interest Expense.
 Interest Income.
 Income
Taxes.
 Minority
Interest.
 Income (Loss) from Continuing Operations.
 Loss
from Discontinued Operations.
 38




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##### Table of Contents



Fiscal Year Ended February 3, 2007 (fiscal 2006) Compared To Fiscal Year Ended January 28, 2006
(fiscal 2005)
 Sales.
 2006
    
    2005DSW
    
    
    2.5
    %
    
    
    5.4
    %Filenes Basement
    
    
    3.1
    %
    
    
    3.5
    %Total
    
    
    2.7
    %
    
    
    4.9
    %
 rd
  rd
 Gross Profit.
  2006
    
    2005DSW
    
    
    43.1
    %
    
    
    42.4
    %Filenes Basement
    
    
    37.0
    %
    
    
    34.3
    %Total
    
    
    41.5
    %
    
    
    40.3
    %
 rd
 rd
 39




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##### Table of Contents



Selling, General and Administrative Expenses.
  2006
    
    2005DSW
    
    
    35.4
    %
    
    
    36.3
    %Filenes Basement
    
    
    39.5
    %
    
    
    39.5
    %Total
    
    
    36.0
    %
    
    
    36.6
    %
   Change in Fair Value of Derivatives.
 License fees and other income.
 Operating (Loss) Profit.
  2006
    
    2005DSW
    
    
    7.9
    %
    
    
    6.1
    %Filenes Basement
    
    
    (0.3
    )%
    
    
    (2.8
    )%Total
    
    
    (4.5
    )%
    
    
    (5.5
    )%
  40




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##### Table of Contents



Interest Expense.
 Interest Income.
 Income
Taxes.
 Minority Interest.
 Loss from Continuing Operations.
 Loss
from Discontinued Operations. rd
 Inflation
  Liquidity and Capital Resources
     41




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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
  42




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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
  43




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##### Table of Contents



$0.25 Million Senior Non-Convertible Loan
  $143,750,000 Premium Income Exchangeable Securities SM (PIES)
     44




---



##### Table of Contents



Auction Rate Securities
  Liquidity and Capital Resources Considerations Relating to the Value City Disposition
    Liquidity Relating to the Filenes Basement Downtown Crossing Boston Store
  Contractual Obligations
  45




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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
    
    DateLongterm debt
    
    $
    166,500
    
    
    
    
    
    
    $
    250
    
    
    $
    143,750
    
    
    $
    22,500
    
    
    $Interest payments on longterm debt(1)
    
    
    35,847
    
    
    $
    9,642
    
    
    
    19,062
    
    
    
    7,143Operating lease obligations (2)
    
    
    1,394,062
    
    
    
    163,002
    
    
    
    326,007
    
    
    
    284,377
    
    
    
    620,676Construction commitments(3)
    
    
    5,835
    
    
    
    5,835Other (4)
    
    
    42,905
    
    
    
    21,689
    
    
    
    7,909
    
    
    
    6,040
    
    
    
    7,267FIN 48 (5)
    
    
    3,941
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,941Total
    
    $
    1,649,090
    
    
    $
    200,168
    
    
    $
    353,228
    
    
    $
    441,310
    
    
    $
    654,384
    
    
    $
 
 (1)
    
    Projected interest payments are for the PIES, Non-Convertible
Loan and the Filenes Basement Revolving
Loan and are based on the outstanding principal amount at February 2, 2008 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 February 2, 2008.(4)
    
    Other contractual obligations include purchase commitments, guarantees and
indemnificiations. 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 February 2, 2008, is $3.9 million,
including approximately $0.9 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.     46




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##### Table of Contents



Recent Accounting Pronouncements
  Off-Balance Sheet Arrangements
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  Auction Rate Securities
  Secured Revolving Credit Facilities
  Warrants
 VCHI Acquisition Co. Warrants
   47




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##### Table of Contents



Term Loan Warrants and Conversion Warrants
   Conversion Feature of PIES
  
 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
    48




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##### Table of Contents



Changes in Internal Control over Financial Reporting
   ITEM 9B. OTHER INFORMATION.
  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
  Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS and OTHER DIRECTOR INFORMATION, COMITTEES OF DIRECTORS AND
CORPORATE GOVERNANCE INFORMATION- CORPORATE GOVERNANCE PRINCIPLES.
  Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
 AUDIT AND
OTHER SERVICE FEES
 49




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 1 5(a)(1) Financial Statements
  Page inForm 10-KReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets at February 2, 2008 and February 3, 2007
    
    
    F-2Consolidated Statements of Operations for the years ended February 2, 2008, February 3, 2007
and January 28, 2006
    
    
    F-4Consolidated Statements of Shareholders Equity for the years ended February 2, 2008, February 3, 2007
and January 28, 2006
    
    
    F-5Consolidated Statements of Cash Flows for the years ended February 2, 2008, February 3, 2007
and January 28, 2006
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-815(a)(2) Consolidated Financial Statement Schedules:The schedule listed below is filed as part of this Form 10-K:Schedule I. Condensed Financial Information of Registrant
    
    
    S-1Schedule II. Valuation and Qualifying Accounts
    
    
    S-2
  15(a)(3) and (b) Exhibits:
  15(c) Additional Financial Statement Schedules:
  50




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##### Table of Contents



SIGNATURES
  RETAIL VENTURES, INC.April 24, 2008
    By:
    /s/ James A. McGradyJames A. McGrady, Executive Vice President, ChiefFinancial Officer, Treasurer and Secretary  Signature
    
    Title
    
    Date*
    
    Chairman of the Board of Directors
    
    April 24, 2008Jay L. Schottenstein/s/ Heywood Wilansky
Heywood Wilansky
    
    President, Chief Executive Officerand Director (Principal Executive Officer)
    
    April 24, 2008/s/ James A. McGrady
James A. McGrady
    
    Executive Vice President, Chief Financial Officer,Treasurer and Secretary (Principal Financial and Accounting Officer)
    
    April 24, 2008*
    
    Director
    
    April 24, 2008Henry L. Aaron*
    
    Director
    
    April 24, 2008Ari Deshe*
    
    Director
    
    April 24, 2008Jon P. Diamond*
    
    Director
    
    April 24, 2008Elizabeth M. Eveillard*
    
    Director
    
    April 24, 2008Lawrence J. Ring*
    
    Director
    
    April 24, 2008Harvey L. Sonnenberg*
    
    Director
    
    April 24, 2008James L. Weisman
 
 *By:
    
    /s/ James A. McGrady
 James A. McGrady (Attorney-in-fact) 51




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##### Table of Contents



Internal Control 
Integrated Framework
    Internal Control 
Integrated Framework
  
 F-1




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##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED BALANCE SHEETS
 February 2, 2008 and February 3, 2007
(in thousands, except share amounts)
 February 2,
    
    
    February 3,2008
    
    
    2007ASSETSCash and equivalents
    
    $
    112,951
    
    
    $
    143,020Restricted cash
    
    
    257Short-term investments
    
    
    70,005
    
    
    
    98,650Accounts receivable, net
    
    
    14,373
    
    
    
    9,369Accounts receivable from related parties
    
    
    2,245
    
    
    
    3,767Inventories
    
    
    339,320
    
    
    
    328,560Prepaid expenses and other current assets
    
    
    31,232
    
    
    
    27,508Deferred income taxes
    
    
    28,225
    
    
    
    25,737Current assets of discontinued operations
    
    
    
    
    
    
    251,336Total current assets
    
    
    598,608
    
    
    
    887,947Property and equipment, at cost:Furniture, fixtures and equipment
    
    
    242,369
    
    
    
    178,110Leasehold improvements
    
    
    176,380
    
    
    
    140,748418,749
    
    
    
    318,858Accumulated depreciation and amortization
    
    
    (164,090
    )
    
    
    (139,390
    )Property and equipment, net
    
    
    254,659
    
    
    
    179,468Goodwill
    
    
    25,899
    
    
    
    25,899Long-term investments
    
    
    12,500Note
receivable from discontinued operations
    
    
    
    
    
    
    34,441Tradenames and other intangibles, net
    
    
    19,927
    
    
    
    26,401Deferred income taxes
    
    
    
    
    
    
    26,114Conversion feature of long-term debt
    
    
    30,848Other assets
    
    
    9,524
    
    
    
    8,926Non current assets of discontinued operations
    
    
    
    
    
    
    112,462Total assets
    
    $
    951,965
    
    
    $
    1,301,658
  F-2




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##### Table of Contents



RETAIL VENTURES, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
February 2, 2008 and February 3, 2007
(in thousands, except share amounts)
 February 2,
    
    
    February 3,2008
    
    
    2007LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    149,900
    
    
    $
    144,037Accounts payable to related parties
    
    
    2,431
    
    
    
    48,652Accrued expenses:Compensation
    
    
    8,407
    
    
    
    33,260Taxes
    
    
    22,857
    
    
    
    19,696Guarantees
from discontinued operations
    
    
    17,477Other
    
    
    59,461
    
    
    
    60,769Warrant liability
    
    
    936
    
    
    
    3,594Warrant liability-related parties
    
    
    41,277
    
    
    
    212,806Current liabilities of discontinued operations
    
    
    
    
    
    
    90,694Total current liabilities
    
    
    302,746
    
    
    
    613,508Long-term obligations
    
    
    157,793
    
    
    
    168,053Conversion feature of long-term debt
    
    
    
    
    
    
    62,770Other noncurrent liabilities
    
    
    128,497
    
    
    
    89,698Deferred income taxes
    
    
    29,657Non current liabilities of discontinued operations
    
    
    
    
    
    
    137,581Minority interest
    
    
    160,349
    
    
    
    138,428Commitments and contingenciesShareholders equity:Common shares, without par value; 160,000,000 authorized; issued
and outstanding, including 7,551 treasury shares, 48,623,430 and
47,270,777 outstanding, respectively
    
    
    305,254
    
    
    
    276,690Accumulated deficit
    
    
    (130,577
    )
    
    
    (184,461
    )Treasury shares, at cost, 7,551 shares
    
    
    (59
    )
    
    
    (59
    )Warrants
    
    
    124Accumulated other comprehensive loss
    
    
    (1,819
    )
    
    
    (233
    )Accumulated other comprehensive loss from discontinued operations
    
    
    
    
    
    
    (317
    )Total shareholders equity
    
    
    172,923
    
    
    
    91,620Total liabilities and shareholders equity
    
    $
    951,965
    
    
    $
    1,301,658
  F-3




---



##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended February 2, 2008, February 3, 2007 and January 28, 2006
(in thousands, except per share amounts)
 February 2,
    
    
    February 3,
    
    
    January 28,2008
    
    
    2007
    
    
    2006Net sales
    
    $
    1,871,904
    
    
    $
    1,706,533
    
    
    $
    1,533,396Cost of sales
    
    
    (1,120,899
    )
    
    
    (997,667
    )
    
    
    (915,009
    )Gross profit
    
    
    751,005
    
    
    
    708,866
    
    
    
    618,387Selling, general and administrative expenses
    
    
    (694,108
    )
    
    
    (614,015
    )
    
    
    (561,845
    )Change in fair value of derivative instruments
    
    
    96,276
    
    
    
    (53,012
    )
    
    
    (151
    )Change in fair value of derivative instruments- related parties
    
    
    151,917
    
    
    
    (122,943
    )
    
    
    (144,058
    )License fees and other income
    
    
    6,576
    
    
    
    4,638
    
    
    
    2,843Operating profit (loss)
    
    
    311,666
    
    
    
    (76,466
    )
    
    
    (84,824
    )Non-related parties interest expense
    
    
    (13,536
    )
    
    
    (7,159
    )
    
    
    (4,125
    )Related parties interest expense
    
    
    (12
    )
    
    
    (2,284
    )
    
    
    (7,407
    )Total interest expense
    
    
    (13,548
    )
    
    
    (9,443
    )
    
    
    (11,532
    )Interest income
    
    
    10,472
    
    
    
    7,306
    
    
    
    Interest expense, net
    
    
    (3,076
    )
    
    
    (2,137
    )
    
    
    (11,532
    )Income (loss) from continuing operations before income taxes
and minority interest
    
    
    308,590
    
    
    
    (78,603
    )
    
    
    (96,356
    )Income tax expense
    
    
    (86,607
    )
    
    
    (25,873
    )
    
    
    (23,745
    )Income (loss) from continuing operations before minority interest
    
    
    221,983
    
    
    
    (104,476
    )
    
    
    (120,101
    )Minority interest
    
    
    (19,879
    )
    
    
    (24,166
    )
    
    
    (7,002
    )Income (loss) from continuing operations
    
    
    202,104
    
    
    
    (128,642
    )
    
    
    (127,103
    )Loss from discontinued operations, net of tax
    
    
    (150,662
    )
    
    
    (22,271
    )
    
    
    (56,315
    )Net income (loss)
    
    $
    51,442
    
    
    $
    (150,913
    )
    
    $
    (183,418
    )Basic earnings (loss) per share from continuing operations
    
    $
    4.20
    
    
    $
    (2.85
    )
    
    $
    (3.29
    )Diluted earnings (loss) per share from continuing operations
    
    $
    3.56
    
    
    $
    (2.85
    )
    
    $
    (3.29
    )Basic loss per share from discontinued operations
    
    $
    (3.13
    )
    
    $
    (0.49
    )
    
    $
    (1.46
    )Diluted loss per share from discontinued operations
    
    $
    (2.65
    )
    
    $
    (0.49
    )
    
    $
    (1.46
    )Basic earnings (loss) per share
    
    $
    1.07
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )Diluted earnings (loss) per share
    
    $
    0.91
    
    
    $
    (3.35
    )
    
    $
    (4.75
    )Basic shares
    
    
    48,165
    
    
    
    45,088
    
    
    
    38,586Diluted shares
    
    
    56,794
    
    
    
    45,088
    
    
    
    38,586
  F-4




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##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Years Ended February 2, 2008, February 3, 2007 and January 28, 2006
(in thousands)
 Number of SharesRetained
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    Deferred
    
    
    
    
    
    
    OtherCommon
    
    
    Shares in
    
    
    Common
    
    
    
    
    
    
    (Accumulated
    
    
    Compensation
    
    
    Treasury
    
    
    Comprehen-Shares
    
    
    Treasury
    
    
    Shares
    
    
    Warrants
    
    
    Deficit)
    
    
    Expense
    
    
    Shares
    
    
    sive Loss
    
    
    TotalBalance, January
29, 2005
    
    
    34,111
    
    
    
    8
    
    
    $
    143,477
    
    
    $
    6,074
    
    
    $
    42,756
    
    
    $
    (3
    )
    
    $
    (59
    )
    
    $
    (7,068
    )
    
    $
    185,177Loss from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (127,103
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (127,103
    )Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56,315
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56,315
    )Change in minimum
pension liability,
net of income tax
benefit of $495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    159Change in minimum
pension liability,
net of income tax
benefit of $429,
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    (20
    )Total
comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (183,279
    )Initial public
offering of
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,187Capital
transactions of
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393Exercise of stock
options
    
    
    5,754
    
    
    
    
    
    
    
    26,286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,286Excess tax benefit
related to stock
option excercises
    
    
    
    
    
    
    
    
    
    
    9,974
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,974Amortization of
deferred
compensation
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Warrant
reclassification to
liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,074
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,074
    )Warrant adjustment
to fair value
    
    
    
    
    
    
    
    
    
    
    (20,120
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,120
    )Balance, January
28, 2006
    
    
    39,865
    
    
    
    8
    
    
    $
    159,617
    
    
    $
    
    
    
    $
    (36,082
    )
    
    $
    (1
    )
    
    $
    (59
    )
    
    $
    (6,929
    )
    
    $
    116,546Loss from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128,642
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128,642
    )Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,271
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,271
    )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
    )
    
    $
    91,620
 F-5




---



##### Table of Contents



RETAIL VENTURES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Continued)
Years Ended February 2, 2008, February 3, 2007 and January 28, 2006
(in thousands)
 Number of SharesRetained
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon
    
    
    
    
    
    
    
    
    
    
    Earnings
    
    
    Deferred
    
    
    
    
    
    
    OtherCommon
    
    
    Shares in
    
    
    Common
    
    
    
    
    
    
    (Accumulated
    
    
    Compensation
    
    
    Treasury
    
    
    Comprehen-Shares
    
    
    Treasury
    
    
    Shares
    
    
    Warrants
    
    
    Deficit)
    
    
    Expense
    
    
    Shares
    
    
    sive Loss
    
    
    TotalBalance, February
3, 2007
    
    
    47,271
    
    
    
    8
    
    
    $
    276,690
    
    
    $
    
    
    
    $
    (184,461
    )
    
    $
    
    
    
    $
    (59
    )
    
    $
    (550
    )
    
    $
    91,620Income from
continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    202,104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    202,104Loss from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,662
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,662
    )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




---



##### Table of Contents



RETAIL VENTURES, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended February 2, 2008, February 3, 2007 and January 28, 2006
(in thousands)
 February 2,
    
    
    February 3,
    
    
    January 28,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    51,442
    
    
    $
    (150,913
    )
    
    $
    (183,418
    )Less: Loss from discontinued operations, net of tax
    
    
    150,662
    
    
    
    22,271
    
    
    
    56,315Income (loss) before discontinued operations
    
    
    202,104
    
    
    
    (128,642
    )
    
    
    (127,103
    )Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:Amortization of debt issuance costs and discount on debt
    
    
    3,495
    
    
    
    2,147
    
    
    
    1,044Amortization of deferred compensation
    
    
    
    
    
    
    1
    
    
    
    2Stock based compensation expense
    
    
    947
    
    
    
    634Stock based compensation expense of subsidiary
    
    
    3,083
    
    
    
    2,534Depreciation and amortization
    
    
    40,785
    
    
    
    33,071
    
    
    
    30,997Change in fair value of derivative instruments (($151,917), $122,943 and
$144,058 - related party)
    
    
    (248,193
    )
    
    
    175,955
    
    
    
    144,209Deferred income taxes and other noncurrent liabilities
    
    
    70,931
    
    
    
    (21,475
    )
    
    
    2,050Excess tax benefit related to stock option exercises
    
    
    
    
    
    
    
    
    
    
    9,472Impairment of assets
    
    
    5,622
    
    
    
    832
    
    
    
    507Loss on disposal of assets
    
    
    350
    
    
    
    1,183
    
    
    
    1,305Minority interest in consolidated subsidiary
    
    
    19,879
    
    
    
    24,166
    
    
    
    7,002Other
    
    
    (186
    )
    
    
    1,865
    
    
    
    1,586Change in working capital, assets and liabilities:Accounts receivable
    
    
    (3,482
    )
    
    
    (1,262
    )
    
    
    9,216Inventories
    
    
    (10,760
    )
    
    
    (43,935
    )
    
    
    (11,161
    )Prepaid expenses and other assets
    
    
    (4,690
    )
    
    
    (9,186
    )
    
    
    (7,936
    )Accounts payable
    
    
    9,396
    
    
    
    26,721
    
    
    
    (11,969
    )Proceeds from lease incentives
    
    
    14,002
    
    
    
    10,168
    
    
    
    10,781Accrued expenses
    
    
    (27,052
    )
    
    
    9,536
    
    
    
    8,598Net cash provided by operating activities from continuing operations
    
    
    76,231
    
    
    
    84,313
    
    
    
    68,600Net cash provided by (used in) operating activities from discontinued
operations
    
    
    12,944
    
    
    
    12,667
    
    
    
    (35,856
    )Cash flows from investing activities:Cash paid for property and equipment
    
    
    (115,408
    )
    
    
    (58,657
    )
    
    
    (29,913
    )Purchases of available-for-sale investments
    
    
    (209,855
    )
    
    
    (188,250
    )Maturities and sales from available-for-sale investments
    
    
    226,000
    
    
    
    89,600Acquisition of tradename
    
    
    (21
    )Net cash used in investing activities from continuing operations
    
    
    (99,284
    )
    
    
    (157,307
    )
    
    
    (29,913
    )Net cash used in investing activities from discontinued operations
    
    
    (658
    )
    
    
    (7,408
    )
    
    
    (16,421
    )Cash flows from financing activities:Net (decrease) increase in revolving credit facility
    
    
    (12,500
    )
    
    
    5,000
    
    
    
    (40,021
    )Payments on notes
to discontinued operations
    
    
    
    
    
    
    (84,119
    )
    
    
    (190,322
    )Proceeds from issuance of Premium Income Exchangeable Securities
    
    
    
    
    
    
    143,750Proceeds from exercise of warrants
    
    
    6,000
    
    
    
    31,500Proceeds from exercise of stock options
    
    
    71
    
    
    
    2,934
    
    
    
    26,286Debt issuance costs
    
    
    (587
    )
    
    
    (6,156
    )
    
    
    (1,297
    )Proceeds from sale of stock of subsidiary
    
    
    
    
    
    
    
    
    
    
    277,963Net cash (used in) provided by financing activities from continuing
operations
    
    
    (7,016
    )
    
    
    92,909
    
    
    
    72,609Net cash (used in) provided by financing activities from discontinued
operations
    
    
    (29,487
    )
    
    
    (3,684
    )
    
    
    (50,454
    )Net (decrease) increase in cash and equivalents from continuing operations
    
    $
    (30,069
    )
    
    $
    19,915
    
    
    $
    111,296Cash and equivalents from continuing operations, beginning of year
    
    
    143,020
    
    
    
    123,105
    
    
    
    11,809Cash and equivalents from continuing operations, end of year
    
    $
    112,951
    
    
    $
    143,020
    
    
    $
    123,105Net (decrease) increase in cash and equivalents from discontinued operations
    
    $
    (17,201
    )
    
    $
    1,575
    
    
    $
    (1,823
    )Cash and equivalents from discontinued operations, beginning of year
    
    
    17,201
    
    
    
    15,626
    
    
    
    17,449Cash and equivalents from discontinued operations, end of year
    
    $
    0
    
    
    $
    17,201
    
    
    $
    15,626
 
 F-7




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##### Table of Contents



1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business Operations
    Principles of Consolidation
  Fiscal Year
  Use of Estimates
  Cash and Equivalents
  F-8




---



##### Table of Contents



Investments
   Accounts Receivable, Net
  Concentration of Credit Risk
  Concentration of Vendor Risk
  Inventories
   Pre-Opening Expenses
  F-9




---



##### Table of Contents



Property and Equipment
  Asset Impairment and Long-Lived Assets
   Fiscal Year2007
    
    2006
    
    2005DSW
    
    $
    2,081
    
    
    $
    832
    
    
    $
    234Filenes Basement
    
    
    3,541
    
    
    
    
    
    
    
    273$
    5,622
    
    
    $
    832
    
    
    $
    507
 Store Closings
   Balance at
    
    
    Related
    
    
    
    
    
    
    
    
    
    
    Balance at2/3/07
    
    
    Charges
    
    
    Payments
    
    
    Adjustments
    
    
    2/2/08Employee severance and termination benefits
    
    
    
    
    
    $
    2,104
    
    
    $
    (1,715
    )
    
    $
    
    
    
    $
    389Lease Costs
    
    $
    75
    
    
    
    300
    
    
    
    (360
    )
    
    
    
    
    
    
    15Other
    
    
    
    
    
    
    771
    
    
    
    (771
    )Total
    
    $
    75
    
    
    $
    3,175
    
    
    $
    (2,846
    )
    
    $
    
    
    
    $
    404
 Balance at
    
    
    Related
    
    
    
    
    
    
    
    
    
    
    Balance at1/28/06
    
    
    Charges
    
    
    Payments
    
    
    Adjustments
    
    
    2/3/07Employee severance and termination benefits
    
    $
    86
    
    
    $
    37
    
    
    $
    (123
    )Lease Costs
    
    
    282
    
    
    
    552
    
    
    
    (992
    )
    
    $
    233
    
    
    $
    75Other
    
    
    
    
    
    
    64
    
    
    
    (64
    )Total
    
    $
    368
    
    
    $
    653
    
    
    $
    (1,179
    )
    
    $
    233
    
    
    $
    75
 Goodwill
 Goodwill
and Other Intangible Assets
 F-10




---



##### Table of Contents



Tradenames and Other Intangible Assets
  FilenesCorporate
    
    
    DSW
    
    
    Basement
    
    
    Total(dollars in thousands)As of February 2, 2008Domain name:Not subject to amortization
    
    
    
    
    
    $
    21
    
    
    
    
    
    
    $
    21Tradenames:Gross amount
    
    
    
    
    
    
    12,750
    
    
    $
    9,900
    
    
    
    22,650Accumulated amortization
    
    
    
    
    
    
    (8,287
    )
    
    
    (5,225
    )
    
    
    (13,512
    )Useful life
    
    
    
    
    
    15 years
    
    15 yearsFavorable lease values:Gross amount
    
    
    
    
    
    $
    140
    
    
    $
    23,057
    
    
    $
    23,197Accumulated amortization
    
    
    
    
    
    
    (102
    )
    
    
    (12,327
    )
    
    
    (12,429
    )Useful life
    
    
    
    
    
    14 years
    
    19 yearsAs of February 3, 2007Tradenames:Gross amount
    
    $
    4,066
    
    
    $
    12,750
    
    
    $
    9,900
    
    
    $
    26,716Accumulated amortization
    
    
    (814
    )
    
    
    (7,437
    )
    
    
    (4,565
    )
    
    
    (12,816
    )Useful life
    
    15 years
    
    15 years
    
    15 yearsFavorable lease values:Gross amount
    
    
    
    
    
    $
    140
    
    
    $
    23,057
    
    
    $
    23,197Accumulated amortization
    
    
    
    
    
    
    (98
    )
    
    
    (10,598
    )
    
    
    (10,696
    )Useful life
    
    
    
    
    
    14 years
    
    17 years
  FilenesFiscal Year
    
    Corporate
    
    DSW
    
    Basement
    
    Total2007
    
    $
    271
    
    
    $
    854
    
    
    $
    2,389
    
    
    $
    3,5142008
    
    
    
    
    
    
    854
    
    
    
    2,334
    
    
    
    3,1882009
    
    
    
    
    
    
    854
    
    
    
    1,531
    
    
    
    2,3852010
    
    
    
    
    
    
    854
    
    
    
    1,531
    
    
    
    2,3852011
    
    
    
    
    
    
    854
    
    
    
    1,531
    
    
    
    2,3852012
    
    
    
    
    
    
    854
    
    
    
    1,475
    
    
    
    2,329
 Self-insurance Reserves
  Deferred
Rent
  Construction
and Tenant Allowances
  Revenue Recognition
  F-11




---



##### Table of Contents



Customer Loyalty Program
  Derivative Financial Instruments
 Accounting for Derivative Instruments and Hedging Activities
 Minority Interest
  Earnings Per Share
  Fiscal Year EndedFebruary 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006(in thousands)Assumed exercise of dilutive weighted average shares
outstanding
    
    
    48,165
    
    
    
    45,088
    
    
    
    38,586Assumed exercise of dilutive stock appreciation rights
    
    
    227Assumed exercise of dilutive stock options
    
    
    527Assumed exercise of dilutive term loan warrants
    
    
    2,607Assumed exercise of dilutive conversion warrants
    
    
    5,268Number of shares for computation of dilutive earnings
per share
    
    
    56,794
    
    
    
    45,088
    
    
    
    38,586
 F-12




---



##### Table of Contents



February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006VCHI warrants
    
    
    150Stock options
    
    
    334
    
    
    
    1,335
    
    
    
    1,782SARs
    
    
    499
    
    
    
    978
    
    
    
    1,308Term loan warrants
    
    
    
    
    
    
    4,413
    
    
    
    4,413Conversion warrants
    
    
    
    
    
    
    9,667
    
    
    
    16,667Total of all potentially dilutive instruments
    
    
    983
    
    
    
    16,393
    
    
    
    24,170
 Stock-Based Compensation
 Share-Based Payment
 Comprehensive Income (Loss)
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxes Accounting for Income
Taxes
 Fair Value Measurements
 Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans- an amendment of FASB Statements No. 87, 88, 106,
and 132(R)
 F-13




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##### Table of Contents



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,
 2. DISCONTINUED OPERATIONS
    Fiscal Years EndedFebruary 2,
    
    
    February 3,
    
    
    January 28,2008
    
    
    2007
    
    
    2006(in thousands)Net sales
    
    $
    1,172,687
    
    
    $
    1,361,125
    
    
    $
    1,379,975Loss before income taxes
    
    $
    (60,653
    )
    
    $
    (33,514
    )
    
    $
    (66,836
    )Income tax benefit
    
    
    
    
    
    
    11,243
    
    
    
    10,521Loss from discontinued operations, net of tax
    
    $
    (60,653
    )
    
    $
    (22,271
    )
    
    $
    (56,315
    )
 F-14




---



##### Table of Contents



February 3,2007Cash
    
    $
    17,201Restricted cash
    
    
    511Accounts receivable, net
    
    
    7,667Inventories
    
    
    217,024Prepaid expenses and other
    
    
    8,933Total current assets
    
    
    251,336Property and equipment, net
    
    
    100,440Tradenames and intangibles, net
    
    
    8,574Other non current assets
    
    
    3,448Total non current assets
    
    
    112,462Total assets
    
    $
    363,798Accounts payable, net
    
    $
    24,647Accrued expenses
    
    
    65,281Current maturities of long-term obligations
    
    
    766Total current liabilities
    
    
    90,694Note payable to parent
    
    
    34,441Long-term obligations, net of current maturities
    
    
    97,730Other non current liabilities
    
    
    5,410Total non current liabilities
    
    
    137,581Total liabilities
    
    $
    228,275
 3. RELATED PARTY TRANSACTIONS
      4. STOCK BASED COMPENSATION
 Accounting for Stock Issued to Employees
  F-15




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##### Table of Contents



Retail Ventures Stock Compensation Plans
      January 28,2006Net loss, as reported
    
    $
    (183,418
    )Add: Stock-based employee compensation expense included in
reported net loss, net of tax
    
    
    4,698Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards
    
    
    (5,748
    )Pro forma net loss
    
    $
    (184,468
    )Loss per share:Basic and diluted as reported
    
    $
    (4.75
    )Basic and diluted pro forma
    
    $
    (4.78
    )
 F-16




---



##### Table of Contents



Stock Options
   Fiscal year endedFebruary 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006AssumptionsRisk-free interest rate
    
    
    4.4
    %
    
    
    4.6
    %
    
    
    4.3
    %Expected volatility of Retail Ventures Common Shares
    
    
    56.1
    %
    
    
    62.5
    %
    
    
    71.8
    %Expected option term
    
    5.0
    years
    
    4.8
    years
    
    4.5
    yearsExpected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
  Shares
    
    WAEPOutstanding beginning of year
    
    
    1,335
    
    
    $
    5.59Granted
    
    
    50
    
    
    $
    15.09Exercised
    
    
    (19
    )
    
    $
    3.67Canceled
    
    
    (54
    )
    
    $
    5.83Outstanding end of year
    
    
    1,312
    
    
    $
    5.97Options exercisable end of year
    
    
    1,207
    
    
    $
    5.76Shares available for additional grants
    
    
    5,629
 WeightedAverage
    
    AggregateRemaining
    
    IntrinsicYear ended February 2, 2008:
    
    Shares
    
    WAEP
    
    GDFV
    
    Contract Life
    
    ValueOptions outstanding
    
    
    1,312
    
    
    $
    5.97
    
    
    $
    3.61
    
    
    4 years
    
    $
    3,244Options vested or expected to vest
    
    
    1,304
    
    
    $
    5.96
    
    
    $
    3.61
    
    
    4 years
    
    $
    3,224Options exercisable
    
    
    1,207
    
    
    $
    5.76
    
    
    $
    3.51
    
    
    4 years
    
    $
    2,982
   Stock Appreciation Rights
  F-17




---



##### Table of Contents



Fiscal year ended February 2, 2008Shares
    
    WAEPOutstanding beginning of period
    
    
    978
    
    
    $
    9.49Granted
    
    
    140
    
    
    $
    20.72Exercised
    
    
    (205
    )
    
    $
    6.21Forfeited
    
    
    (188
    )
    
    $
    13.05Outstanding end of period
    
    
    725
    
    
    $
    11.66Exercisable end of period
    
    
    307
    
    
    $
    7.97
  Restricted Stock Units
    F-18




---



##### Table of Contents



Fiscal year ended
    
    Fiscal year endedFebruary 2, 2008
    
    February 3, 2007Units
    
    UnitsOutstanding beginning of period
    
    
    170
    
    
    
    300Granted
    
    
    47
    
    
    
    35Vested
    
    
    (160
    )
    
    
    (160
    )Forfeited
    
    
    
    
    
    
    (5
    )Outstanding end of period
    
    
    57
    
    
    
    170
 DSW Stock Compensation Plan
  Stock Options
   February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Assumptions:Risk-free interest rate
    
    
    4.5
    %
    
    
    4.6
    %
    
    
    4.1
    %Year end volatility of DSW common stock
    
    
    39.4
    %
    
    
    39.9
    %
    
    
    42.3
    %Expected option term
    
    5.0
    years
    
    4.8
    years
    
    5.0
    yearsDividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
  Year EndedFebruary 2, 2008Shares
    
    WAEPOutstanding beginning of year
    
    
    1,084
    
    
    $
    22.14Granted
    
    
    527
    
    
    $
    41.67Exercised
    
    
    (13
    )
    
    $
    20.04Forfeited
    
    
    (78
    )
    
    $
    27.46Outstanding end of year
    
    
    1,520
    
    
    $
    28.65Options exercisable end of year
    
    
    379
    
    
    $
    20.90Shares available for additional grants
    
    
    2,832
 F-19




---



##### Table of Contents



WeightedAverage
    
    AggregateRemaining
    
    IntrinsicYear ended February 2, 2008:
    
    Shares
    
    WAEP
    
    GDFV
    
    Contract Life
    
    ValueOptions outstanding
    
    
    1,520
    
    
    $
    28.65
    
    
    $
    12.12
    
    
    8 years
    
    $
    683Options vested or expected to vest
    
    
    1,435
    
    
    $
    30.34
    
    
    $
    12.06
    
    
    8 years
    
    $
    655Options exercisable
    
    
    379
    
    
    $
    20.90
    
    
    $
    9.00
    
    
    8 years
    
    $
    297
  Restricted Stock Units
    Fiscal year ended February 2, 2008
    
    Fiscal year ended February 3, 2007Weighted-Average
    
    
    
    
    
    Weighted-AverageGrant Date Fair
    
    
    
    
    
    Grant Date FairUnits
    
    Value
    
    Units
    
    ValueOutstanding beginning of period
    
    
    135
    
    
    $
    22.03
    
    
    
    131
    
    
    $
    20.46Granted
    
    
    29
    
    
    $
    28.69
    
    
    
    23
    
    
    $
    30.91Exercised/ Vested
    
    
    (10
    )
    
    $
    24.85
    
    
    
    (10
    )
    
    $
    24.85Forfeited
    
    
    (3
    )
    
    $
    27.96
    
    
    
    (9
    )
    
    $
    19.00Outstanding end of period
    
    
    151
    
    
    $
    23.92
    
    
    
    135
    
    
    $
    22.03
 Director Stock Units
  F-20




---



##### Table of Contents



5. INVESTMENTS
   6. LEASES
   Operating LeasesUnrelated
    
    
    RelatedFiscal Year
    
    Total
    
    
    Party
    
    
    Party2008
    
    $
    163,002
    
    
    $
    145,486
    
    
    $
    17,5162009
    
    
    166,087
    
    
    
    148,315
    
    
    
    17,7722010
    
    
    159,920
    
    
    
    142,190
    
    
    
    17,7302011
    
    
    149,997
    
    
    
    132,118
    
    
    
    17,8792012
    
    
    134,380
    
    
    
    116,096
    
    
    
    18,284Future Years
    
    
    620,676
    
    
    
    497,714
    
    
    
    122,962Total minimum lease payments
    
    $
    1,394,062
    
    
    $
    1,181,919
    
    
    $
    212,143
  February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Minimum rentals:Unrelated parties
    
    $
    125,381
    
    
    $
    108,741
    
    
    $
    100,548Related parties
    
    
    12,945
    
    
    
    10,311
    
    
    
    8,825Contingent rentals:Unrelated parties
    
    
    25,391
    
    
    
    17,749
    
    
    
    17,311Related partiesTotal
    
    $
    163,717
    
    
    $
    136,801
    
    
    $
    126,684
  F-21




---



##### Table of Contents



7. LONG TERM OBLIGATIONS
  February 2,
    
    February 3,2008
    
    2007Credit facilities:Revolving credit facilities
    
    $
    22,500
    
    
    $
    35,000Senior Loan Agreement  related parties
    
    
    250Premium Income Exchangeable Securities (PIES)
    
    
    143,750
    
    
    
    143,750Discount on PIES
    
    
    (8,707
    )
    
    
    (10,697
    )$
    157,793
    
    
    $
    168,053Letters of credit outstanding:Filenes Basement revolving credit facility
    
    $
    3,360Continuing operations under previous VCDS revolving credit facility
    
    
    
    
    
    $
    2,087DSW revolving credit facility
    
    $
    15,711
    
    
    $
    13,448Availability under revolving credit facilities:Filenes Basement revolving credit facility
    
    $
    26,996Continuing operations under previous VCDS revolving credit facility
    
    
    
    
    
    $
    16,839DSW revolving credit facility
    
    $
    134,289
    
    
    $
    136,552
     Revolving Credit Facilities
 $100 Million Secured Revolving Credit Facility   The Filenes Basement Revolving Loan
  F-22




---



##### Table of Contents



$150 Million Secured Revolving Credit Facility  The DSW Revolving Loan
  Term Loans  Related Parties
   Payment of and Amendment to Term Loans
  F-23




---



##### Table of Contents



Non-Convertible Loan  Related Parties
 $75 Million Senior Subordinated Convertible Loan
  $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-24




---



##### Table of Contents



Other Debt Items
    Fiscal Year
    
    Amount20082009
    
    $
    25020102011
    
    
    143,7502012Future Years
    
    
    22,500Total
    
    $
    166,500
 8. PENSION BENEFIT PLANS
  F-25




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##### Table of Contents



February 2,
    
    February 3,2008
    
    2007Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    15,848
    
    
    $
    15,685Interest cost
    
    
    907
    
    
    
    861Benefits paid
    
    
    (1,169
    )
    
    
    (635
    )Actuarial
gain (loss)
    
    
    721
    
    
    
    (63
    )Projected benefit obligation at end of year
    
    $
    16,307
    
    
    $
    15,848Accumulated benefit obligation at end of year
    
    $
    16,307
    
    
    $
    15,848
 February 2,
    
    February 3,2008
    
    2007Change in plan assets:Fair market value at beginning of year
    
    $
    15,464
    
    
    $
    13,794Actual (loss) return on plan assets
    
    
    (449
    )
    
    
    1,409Employer contributions
    
    
    900
    
    
    
    1,000Benefits paid
    
    
    (1,169
    )
    
    
    (635
    )Other
    
    
    (183
    )
    
    
    (104
    )Fair market value at end of year
    
    $
    14,563
    
    
    $
    15,464
   Fiscal Year
    
    Amount2008
    
    $
    7172009
    
    
    7222010
    
    
    7252011
    
    
    7332012
    
    
    7912013 - 2018
    
    
    4,808
  February 2,
    
    
    February 3,2008
    
    
    2007Deferred income tax asset  long term
    
    $
    884
    
    
    $
    150Other non-current liabilities
    
    
    (1,744
    )
    
    
    (383
    )Total
    
    $
    (860
    )
    
    $
    (233
    )
  February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Interest cost
    
    $
    907
    
    
    $
    861
    
    
    $
    858Expected return on plan assets
    
    
    (1,212
    )
    
    
    (1,077
    )
    
    
    (938
    )Amortization of transition (asset) obligation
    
    
    (38
    )
    
    
    (38
    )
    
    
    (38
    )Amortization of net loss
    
    
    244
    
    
    
    290
    
    
    
    342Net periodic benefit cost
    
    $
    (99
    )
    
    $
    36
    
    
    $
    224
 F-26




---



##### Table of Contents



Remaining unrecognized benefit obligation existing at transition
    
    $
    (38
    )Unrecognized net loss
    
    
    442Total
    
    $
    404
  February 2,
    
    February 3,2008
    
    2007Discount rate
    
    
    6.0
    %
    
    
    6.0
    %Expected long-term rate of return
    
    
    8.0
    %
    
    
    8.0
    %
  February 2,
    
    February 3,2008
    
    2007Equity securities
    
    
    55.0
    %
    
    
    55.0
    %Fixed securities
    
    
    44.4
    %
    
    
    44.5
    %Other
    
    
    0.6
    %
    
    
    0.5
    %100.0
    %
    
    
    100.0
    %
 9. OTHER BENEFIT PLANS
  10. SHAREHOLDERS EQUITY AND WARRANT LIABILITY
  Warrants
 VCHI Acquisition Co. Warrants
  F-27




---



##### Table of Contents



Term Loan Warrants and Conversion Warrants
 Accounting for Derivative
Instruments and Hedging Activities
    11. COMMITMENTS AND CONTINGENCIES
    F-28




---



##### Table of Contents



Accounting for Contingencies
  Guarantees
  Contractual
Obligations
  12. INCOME TAXES
  February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Current:Federal
    
    $
    30,260
    
    
    $
    37,050
    
    
    $
    18,602State and local
    
    
    6,538
    
    
    
    7,051
    
    
    
    4,944Total current tax expense
    
    
    36,798
    
    
    
    44,101
    
    
    
    23,546Deferred:Federal
    
    
    47,476
    
    
    
    (18,010
    )
    
    
    (4,271
    )State and local
    
    
    2,333
    
    
    
    (218
    )
    
    
    4,470Total deferred tax expense (benefit)
    
    
    49,809
    
    
    
    (18,228
    )
    
    
    199Income tax expense
    
    $
    86,607
    
    
    $
    25,873
    
    
    $
    23,745
 F-29




---



##### Table of Contents



February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Income tax (benefit) expense at federal statutory rate of 35%
    
    $
    108,136
    
    
    $
    (27,797
    )
    
    $
    (33,855
    )Warrant liability marked to market
    
    
    (54,058
    )
    
    
    43,685
    
    
    
    50,473Jobs credit
    
    
    (485
    )
    
    
    (357
    )
    
    
    (685
    )State and local taxes, net
    
    
    6,362
    
    
    
    3,193
    
    
    
    4,018Tax exempt interest
    
    
    (1,476
    )
    
    
    (498
    )Non-deductible interest
    
    
    
    
    
    
    
    
    
    
    222Valuation allowance
    
    
    23,188
    
    
    
    1,694
    
    
    
    2,148Federal reserve
    
    
    
    
    
    
    1,895Provision to return adjustments
    
    
    29
    
    
    
    (2,889
    )
    
    
    101Change in subsidiary basis
    
    
    4,013
    
    
    
    6,025
    
    
    
    910Other
    
    
    898
    
    
    
    922
    
    
    
    413Income tax expense
    
    $
    86,607
    
    
    $
    25,873
    
    
    $
    23,745
  February 2,
    
    February 3,2008
    
    2007Deferred tax assets:Basis differences in inventory
    
    $
    5,394
    
    
    $
    10,587Basis differences in property and equipment
    
    
    (576
    )
    
    
    12,311Deferred compensation
    
    
    6,587
    
    
    
    5,667Intangible assets
    
    
    4,318
    
    
    
    2,441State net operating loss & credits
    
    
    23,272
    
    
    
    15,263Federal net operating loss
    
    
    97,614
    
    
    
    22,496Federal tax credit
    
    
    14,682
    
    
    
    13,621FIN 45 reserves
    
    
    10,371Unrealized tax benefit
    
    
    2,446Tenant allowance
    
    
    1,598
    
    
    
    1,415Capital leases
    
    
    
    
    
    
    3,462Workers compensation
    
    
    1,283
    
    
    
    7,160Deferred revenue
    
    
    
    
    
    
    4,663Accrued expenses
    
    
    3,725
    
    
    
    5,294Accrued rent
    
    
    16,006
    
    
    
    14,788PIES
    
    
    (8,949
    )
    
    
    24,354Other
    
    
    3,791
    
    
    
    4,365Total deferred tax assets
    
    
    181,562
    
    
    
    147,887Less: Valuation allowance
    
    
    (100,546
    )
    
    
    (15,648
    )81,016
    
    
    
    132,239Deferred tax liabilities:Basis in subsidiary
    
    
    (76,493
    )
    
    
    (72,480
    )Prepaid expenses
    
    
    (5,705
    )
    
    
    (6,816
    )Deferred Revenue  CAT Credit
    
    
    (250
    )
    
    
    (1,092
    )Total deferred tax liabilities
    
    
    (82,448
    )
    
    
    (80,388
    )Total net
    
    $
    (1,432
    )
    
    $
    51,851
 F-30




---



##### Table of Contents



February 2,
    
    February 3,2008
    
    2007Current deferred tax asset
    
    $
    28,225
    
    
    $
    25,737Non current deferred tax (liability) asset
    
    
    (29,657
    )
    
    
    26,114Net deferred tax asset (liability)
    
    $
    (1,432
    )
    
    $
    51,851
     Unrecognized TaxBenefitsBalance at February 4, 2007
    
    $
    2,004Decreases  Tax Positions taken in a prior period
    
    
    (1,123
    )Increases  Tax Positions taken in the current period
    
    
    2,147Balance at February 2, 2008
    
    $
    3,028
 13. SEGMENT REPORTING
  F-31




---



##### Table of Contents



Filenes
    
    
    
    
    
    IntersegmentDSW
    
    Basement
    
    Corporate
    
    Eliminations
    
    TotalAs of and for the year ended
February 2, 2008Net sales
    
    $
    1,405,615
    
    
    $
    466,289
    
    
    
    
    
    
    
    
    
    
    $
    1,871,904Operating profit (loss)
    
    
    81,321
    
    
    
    (17,848
    )
    
    $
    248,193
    
    
    
    
    
    
    
    311,666Depreciation and amortization
    
    
    25,055
    
    
    
    12,487
    
    
    
    3,243
    
    
    
    
    
    
    
    40,785Interest expense
    
    
    1,178
    
    
    
    7,936
    
    
    
    12,718
    
    
    $
    (8,284
    )
    
    
    13,548Interest income
    
    
    7,148
    
    
    
    124
    
    
    
    11,484
    
    
    
    (8,284
    )
    
    
    10,472Income tax expense
    
    
    (33,516
    )
    
    
    (14,205
    )
    
    
    (38,886
    )
    
    
    
    
    
    
    (86,607
    )Capital expenditures
    
    
    102,451
    
    
    
    17,152
    
    
    
    (715
    )
    
    
    
    
    
    
    118,888Total assets
    
    
    693,882
    
    
    
    162,099
    
    
    
    222,361
    
    
    
    (126,377
    )
    
    
    951,965
 Filenes
    
    
    
    
    
    IntersegmentDSW
    
    Basement
    
    Corporate
    
    Eliminations
    
    TotalAs of and for the year ended
February 3, 2007Net sales
    
    $
    1,279,060
    
    
    $
    427,473
    
    
    
    
    
    
    
    
    
    
    $
    1,706,533Operating profit (loss)
    
    
    100,714
    
    
    
    (1,225
    )
    
    $
    (175,955
    )
    
    
    
    
    
    
    (76,466
    )Depreciation and amortization
    
    
    20,686
    
    
    
    9,282
    
    
    
    3,103
    
    
    
    
    
    
    
    33,071Interest expense
    
    
    614
    
    
    
    6,791
    
    
    
    7,873
    
    
    $
    (5,835
    )
    
    
    9,443Interest income
    
    
    7,527
    
    
    
    40
    
    
    
    5,574
    
    
    
    (5,835
    )
    
    
    7,306Income tax (expense) benefit
    
    
    (42,164
    )
    
    
    2,215
    
    
    
    14,076
    
    
    
    
    
    
    
    (25,873
    )Capital expenditures
    
    
    42,407
    
    
    
    16,118
    
    
    
    (317
    )
    
    
    
    
    
    
    58,208Total assets
    
    
    603,785
    
    
    
    175,287
    
    
    
    437,750
    
    
    
    (278,962
    )
    
    
    937,860
 Filenes
    
    
    
    
    
    IntersegmentDSW
    
    Basement
    
    Corporate
    
    Eliminations
    
    TotalFor the year ended January 28,
2006Net sales
    
    $
    1,144,061
    
    
    $
    389,335
    
    
    
    
    
    
    
    
    
    
    $
    1,533,396Operating profit (loss)
    
    
    70,112
    
    
    
    (10,727
    )
    
    $
    (144,209
    )
    
    
    
    
    
    
    (84,824
    )Depreciation and amortization
    
    
    19,443
    
    
    
    8,662
    
    
    
    2,892
    
    
    
    
    
    
    
    30,997Interest expense
    
    
    8,892
    
    
    
    3,743
    
    
    
    6,928
    
    
    $
    (8,031
    )
    
    
    11,532Interest income
    
    
    1,388
    
    
    
    57
    
    
    
    6,586
    
    
    
    (8,031
    )Income tax (expense) benefit
    
    
    (25,426
    )
    
    
    3,526
    
    
    
    (1,845
    )
    
    
    
    
    
    
    (23,745
    )Capital expenditures
    
    
    25,537
    
    
    
    4,112
    
    
    
    1,434
    
    
    
    
    
    
    
    31,083
  February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006Apparel and ready to wear
    
    $
    323,977
    
    
    $
    298,477
    
    
    $
    284,525Jewelry, hard goods and home furnishings
    
    
    69,105
    
    
    
    68,525
    
    
    
    65,186Shoes and other footwear
    
    
    1,478,822
    
    
    
    1,339,531
    
    
    
    1,183,685Total
    
    $
    1,871,904
    
    
    $
    1,706,533
    
    
    $
    1,533,396
 F-32




---



##### Table of Contents



14. QUARTERLY FINANCIAL DATA (UNAUDITED):
 Year Ended February 2, 2008
 Thirteen weeks endedMay 5,
    
    August 4,
    
    November
    
    February(in thousands except per share data)
    
    2007
    
    2007
    
    3, 2007
    
    2, 2008Net sales
    
    $
    465,839
    
    
    $
    464,638
    
    
    $
    489,394
    
    
    $
    452,033Cost of sales
    
    
    (266,426
    )
    
    
    (288,028
    )
    
    
    (284,445
    )
    
    
    (282,000
    )Gross profit
    
    
    199,413
    
    
    
    176,610
    
    
    
    204,949
    
    
    
    170,033Selling, general and administrative expenses
    
    
    (172,687
    )
    
    
    (171,674
    )
    
    
    (177,193
    )
    
    
    (172,554
    )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
    
    
    
    8,283License fees and other income
    
    
    1,753
    
    
    
    1,316
    
    
    
    1,872
    
    
    
    1,635Operating profit
    
    
    41,028
    
    
    
    131,036
    
    
    
    120,975
    
    
    
    18,627Non-related parties interest expense
    
    
    (3,064
    )
    
    
    (3,129
    )
    
    
    (3,177
    )
    
    
    (4,166
    )Related parties interest expense
    
    
    (4
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    (3
    )Total interest expense
    
    
    (3,068
    )
    
    
    (3,132
    )
    
    
    (3,179
    )
    
    
    (4,169
    )Interest income
    
    
    2,640
    
    
    
    2,945
    
    
    
    2,633
    
    
    
    2,254Interest expense, net
    
    
    (428
    )
    
    
    (187
    )
    
    
    (546
    )
    
    
    (1,915
    )Income from continuing operations before income taxes and
minority interest
    
    
    40,600
    
    
    
    130,849
    
    
    
    120,429
    
    
    
    16,712Income tax expense
    
    
    (18,723
    )
    
    
    (12,877
    )
    
    
    (29,701
    )
    
    
    (25,306
    )Income
(loss) from continuing operations before minority interest
    
    
    21,877
    
    
    
    117,972
    
    
    
    90,728
    
    
    
    (8,594
    )Minority interest
    
    
    (8,775
    )
    
    
    (2,411
    )
    
    
    (8,295
    )
    
    
    (398
    )Income
(loss)  from continuing operations
    
    
    13,102
    
    
    
    115,561
    
    
    
    82,433
    
    
    
    (8,992
    )Loss from discontinued operations, net of tax
    
    
    (10,362
    )
    
    
    (9,343
    )
    
    
    (14,211
    )
    
    
    (116,746
    )Net income (loss)
    
    $
    2,740
    
    
    $
    106,218
    
    
    $
    68,222
    
    
    $
    (125,738
    )Earnings (loss) per share(1):Basic
earnings (loss) per share from continuing operations
    
    $
    0.28
    
    
    $
    2.40
    
    
    $
    1.70
    
    
    $
    (0.19
    )Diluted
earnings (loss) per share from continuing operations
    
    $
    0.22
    
    
    $
    1.97
    
    
    $
    1.45
    
    
    $
    (0.19
    )Basic loss per share from discontinued operations
    
    $
    (0.22
    )
    
    $
    (0.19
    )
    
    $
    (0.29
    )
    
    $
    (2.40
    )Diluted loss per share from discontinued operations
    
    $
    (0.17
    )
    
    $
    (0.16
    )
    
    $
    (0.25
    )
    
    $
    (2.40
    )Basic earnings (loss) per share
    
    $
    0.06
    
    
    $
    2.21
    
    
    $
    1.40
    
    
    $
    (2.59
    )Diluted earnings (loss) per share
    
    $
    0.05
    
    
    $
    1.81
    
    
    $
    1.20
    
    
    $
    (2.59
    )
 F-33




---



##### Table of Contents



Year Ended February 3, 2007
 FourteenweeksThirteen weeks ended
    
    endedApril 29,
    
    July 29,
    
    October 28,
    
    February 3,(in thousands except per share data)
    
    2006
    
    2006
    
    2006
    
    2007Net sales
    
    $
    407,086
    
    
    $
    394,146
    
    
    $
    446,414
    
    
    $
    458,887Cost of sales
    
    
    (236,989
    )
    
    
    (229,202
    )
    
    
    (257,288
    )
    
    
    (274,188
    )Gross profit
    
    
    170,097
    
    
    
    164,944
    
    
    
    189,126
    
    
    
    184,699Selling, general and administrative expenses
    
    
    (146,393
    )
    
    
    (143,671
    )
    
    
    (163,001
    )
    
    
    (160,950
    )Change in fair value of derivative instruments
    
    
    (926
    )
    
    
    (311
    )
    
    
    (28,009
    )
    
    
    (23,766
    )Change in fair value of derivative instruments  related party
    
    
    (63,883
    )
    
    
    (15,032
    )
    
    
    (2,565
    )
    
    
    (41,463
    )License fees and other income
    
    
    542
    
    
    
    657
    
    
    
    1,001
    
    
    
    2,438Operating (loss) profit
    
    
    (40,563
    )
    
    
    6,587
    
    
    
    (3,448
    )
    
    
    (39,042
    )Non-related parties interest expense
    
    
    (701
    )
    
    
    (835
    )
    
    
    (2,579
    )
    
    
    (3,044
    )Related parties interest expense
    
    
    (430
    )
    
    
    (430
    )
    
    
    (1,420
    )
    
    
    (4
    )Total interest expense
    
    
    (1,131
    )
    
    
    (1,265
    )
    
    
    (3,999
    )
    
    
    (3,048
    )Interest income
    
    
    646
    
    
    
    1,390
    
    
    
    1,969
    
    
    
    3,301Interest (expense) income, net
    
    
    (485
    )
    
    
    125
    
    
    
    (2,030
    )
    
    
    253(Loss) income from continuing operations before income taxes
and minority interest
    
    
    (41,048
    )
    
    
    6,712
    
    
    
    (5,478
    )
    
    
    (38,789
    )Income tax (expense) benefit
    
    
    (9,755
    )
    
    
    (8,759
    )
    
    
    (11,700
    )
    
    
    4,341Loss from continuing operations before minority interest
    
    
    (50,803
    )
    
    
    (2,047
    )
    
    
    (17,178
    )
    
    
    (34,448
    )Minority interest
    
    
    (6,464
    )
    
    
    (5,660
    )
    
    
    (5,909
    )
    
    
    (6,133
    )Loss from continuing operations
    
    
    (57,267
    )
    
    
    (7,707
    )
    
    
    (23,087
    )
    
    
    (40,581
    )(Loss) income from discontinued operations, net of tax
    
    
    (7,681
    )
    
    
    (8,294
    )
    
    
    (10,987
    )
    
    
    4,691Net loss
    
    $
    (64,948
    )
    
    $
    (16,001
    )
    
    $
    (34,074
    )
    
    $
    (35,890
    )(Loss) earnings per share(1):Basic loss per share from continuing operations
    
    $
    (1.39
    )
    
    $
    (0.17
    )
    
    $
    (0.49
    )
    
    $
    (0.86
    )Diluted loss per share from continuing operations
    
    $
    (1.39
    )
    
    $
    (0.17
    )
    
    $
    (0.49
    )
    
    $
    (0.86
    )Basic (loss) earnings per share from discontinued operations
    
    $
    (0.19
    )
    
    $
    (0.19
    )
    
    $
    (0.23
    )
    
    $
    0.10Diluted (loss) earnings per share from discontinued
operations
    
    $
    (0.19
    )
    
    $
    (0.19
    )
    
    $
    (0.23
    )
    
    $
    0.10Basic loss per share
    
    $
    (1.58
    )
    
    $
    (0.36
    )
    
    $
    (0.72
    )
    
    $
    (0.76
    )Diluted loss per share
    
    $
    (1.58
    )
    
    $
    (0.36
    )
    
    $
    (0.72
    )
    
    $
    (0.76
    )
 (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-34




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##### Table of Contents



15. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 February 2,
    
    February 3,
    
    January 28,2008
    
    2007
    
    2006(in thousands)Cash paid during the period for:Interest to non related parties
    
    $
    14,101
    
    
    $
    5,045
    
    
    $
    1,394Income taxes
    
    $
    35,537
    
    
    $
    40,530
    
    
    $
    14,767Noncash investing and operating activities:Increase (decrease) in accounts payable due to asset purchases
    
    $
    3,463
    
    
    $
    (752
    )
    
    $
    958Additional 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
 F-35




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##### Table of Contents



RETAIL VENTURES, INC.
SCHEDULE I  Condensed Financial Information of Registrant
(dollars in thousands)
 Description
    
    AmountDividend paid to registrant from DSW Inc.:January 28, 2006
    
    $
    190,000February 3, 2007
    
    NoneFebruary 2, 2008
    
    None
 S-1




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##### Table of Contents



RETAIL VENTURES, INC.
SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
(dollars in thousands)
 Balance at
    
    Charges to
    
    Charges toBeginning of
    
    Costs and
    
    Other
    
    
    
    
    
    Balance atDescription
    
    Period
    
    Expenses
    
    Accounts
    
    Deductions(1)
    
    End of PeriodAllowance deducted from asset to which it applies:Inventory ReserveJanuary 28, 2006
    
    $
    20,147
    
    
    $
    6,427
    
    
    
    
    
    
    $
    3,029
    
    
    $
    23,545February 3, 2007
    
    
    23,545
    
    
    
    3,643
    
    
    
    
    
    
    
    2,156
    
    
    
    25,032February 2, 2008
    
    
    25,032
    
    
    
    17,933
    
    
    
    
    
    
    
    11,212
    
    
    
    31,753Allowance for Sales ReturnsJanuary 28, 2006
    
    $
    1,732
    
    
    $
    2,148
    
    
    
    
    
    
    $
    1,821
    
    
    $
    2,059February 3, 2007
    
    
    2,059
    
    
    
    2,075
    
    
    
    
    
    
    
    1,472
    
    
    
    2,662February 2, 2008
    
    
    2,662
    
    
    
    1,896
    
    
    
    
    
    
    
    2,796
    
    
    
    1,762Store Closing ReserveJanuary 28, 2006
    
    $
    532
    
    
    $
    86
    
    
    
    
    
    
    $
    250
    
    
    $
    368February 3, 2007
    
    
    368
    
    
    
    653
    
    
    
    
    
    
    
    946
    
    
    
    75February 2, 2008
    
    
    75
    
    
    
    3,175
    
    
    
    
    
    
    
    2,846
    
    
    
    404
 
 (1)
    
    The deductions are amounts written off against the reserve. S-2




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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, 2008.3.1
    
    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.10.1
    
    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.
 E-1




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##### Table of Contents



ExhibitNo.
    
    Description10.2*
    
    License Agreement, dated
January 23, 2008, between Value City of Michigan, Inc. and
Retail Ventures Licensing, Inc.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.
2006.10.5
    
    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, 2005.10.6
    
    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, 200510.8#
    
    Amended and Restated Retail Ventures, Inc. 1991 Stock Option Plan. Incorporated by reference to Exhibit 4(a)
to Amendment No. 1 to Form S-8 Registration Statement (file no. 333-45852) filed October 16, 2003.10.10#
    
    Retail Ventures, Inc. Amended and Restated 2000 Stock Incentive Plan (the 2000 Stock Incentive Plan).
Incorporated by reference to Exhibit 4(a) to Amendment No. 1 to Form S-8 Registration Statement (file no.
333-100398) filed on October 16, 2003.10.11#
    
    Amended and Restated Retail Ventures, Inc. Non-Employee Director Stock Option Plan. Incorporated by reference
to Exhibit 4(a) to Form S-8 Registration Statement (file no. 333-45856) filed October 16, 2003.10.12**
    
    Sublease, dated April 25, 1991, between the Company, as sublessor, and SSC, as sublessee, re: Baltimore, MD
(Eastpoint) furniture store location. Incorporated by reference to Exhibit 10.15.1 to Registration Statement
on Form S-1 (file no. 33-40214) filed April 29, 1991.10.13**
    
    Sublease, dated April 25, 1991, between the Company, as sublessor, and SSC, as sublessee, re: Baltimore, MD
(Westview) furniture store location. Incorporated by reference to Exhibit 10.15.2 to Registration Statement
on Form S-1 (file no. 33-40214) filed April 29, 1991.10.14**
    
    Sublease, dated April 25, 1991, between the Company, as sublessor, and SSC, as sublessee, re: Lansing, MI
furniture store location. Incorporated by reference to Exhibit 10.15.3 to Registration Statement on Form S-1
(file no. 33-40214) filed April 29, 1991.10.15**
    
    Sublease, dated April 25, 1991, between the Company, as sublessor, and SSC, as sublessee, re: Louisville, KY
(Preston Highway) furniture store location. Incorporated by reference to Exhibit 10.15.4 to Registration
Statement on Form S-1 (file no. 33-40214) filed April 29, 1991.10.16**
    
    Form of Assignment and Assumption Agreement between the Company, as assignee, and SSC, as assignor, re:separate assignments of leases for 31 stores. Incorporated by reference to Exhibit 10.16 to Registration
Statement on Form S-1 (file no. 33-40214) filed April 29, 1991.10.17**
    
    Lease Agreement, dated July 1, 1988, between the Company, by assignment from SSC, dated April 25, 1991, as
sublessee, and SSC, as sublessor, re: Benwood, WV store location. Incorporated by reference to Exhibit 10.19
to Form 10-K (file no.1-10767) filed October 24, 1991.10.18#
    
    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, 1992.10.19**
    
    Lease, dated September 1, 1992, between the Company, as lessee, and SSC, as lessor, re: South Bend/Mishawaka,
IN store. Incorporated by reference to Exhibit 10.29 to Form 10-K (file no.1-10767) filed October 22, 1992.10.20
    
    Lease, dated January 27, 1992, between the Company, as lessee, and J.A.L. Realty Company, an affiliate of
SSC, as lessor, re: 3080 Alum Creek Drive, Columbus, OH warehouse. Incorporated by reference to Exhibit 10.30
to Form 10-K (file no.1-10767) filed October 22, 1992.
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##### Table of Contents



ExhibitNo.
    
    Description10.20.1
    
    Exercise of the first five-year renewal option commencing February 1, 1997 under lease, dated January 27,
1992, as amended, between the Company, as lessee, and J.A.L. Realty Company, an affiliate of SSC, as lessor,
re: 3080 Alum Creek Drive, Columbus, OH warehouse. Incorporated by reference to Exhibit 10.30.1 to Form 10-Q
(file no. 1-10767) filed March 19, 1996.10.21
    
    Lease, dated July 29, 1992, between the Company, as lessee, and J.A.L. Realty Company, an affiliate of SSC,
as lessor, re: 3232 Alum Creek Drive, Columbus, OH warehouse. Incorporated by reference to Exhibit 10.31 to
Form 10-K (file no.1-10767) filed October 22, 1992.10.22**
    
    Ground lease, dated April 15, 1994, between the Company, as lessee, and J.A.L. Realty Company, an affiliate
of SSC, as lessor, re: 19 acres (Westerville Rd., Columbus, OH). Incorporated by reference to Exhibit 10.35
to Form 10-K (file no. 1-10767) filed October 26, 1994.10.23**
    
    Agreement of Lease, dated March 1, 1994, between the Company, as tenant, and Jubilee Limited Partnership, an
affiliate of SSC, as landlord, re: Hobart, IN store. Incorporated by reference to Exhibit 10.37 to Form 10-Q
(file no. 1-10767) filed December 12, 1994.10.24**
    
    Agreement of Lease, dated January 13, 1995, between the Company, as tenant, and Westland Partners, an
affiliate of SSC, as landlord, re: Westland, MI store. Incorporated by reference to Exhibit 10.39 to Form
10-Q, (file no. 1-10767) filed March 14, 1995.10.25**
    
    Agreement of Lease, dated January 13, 1995, between the Company, as tenant, and Taylor Partners, an affiliate
of SSC, as landlord, re: Taylor, MI store. Incorporated by reference to Exhibit 10.40 to Form 10-Q, (file no.
1-10767) filed March 14, 1995.10.26**
    
    Lease, dated September 2, 1997, between the Company, as lessee, and SSC-Fort Wayne L.L.C., an affiliate of
SSC, as lessor. Incorporated by reference to Exhibit 10.33.1 to Form 10-K (file no. 1-10767) filed April 29,
2002.10.27**
    
    Agreement of Lease, dated April 10, 1995, between the Company, as tenant, and Independence Limited Liability
Company, an affiliate of SSC, as landlord, re: Charlotte, NC store. Incorporated by reference to Exhibit
10.45 to Form 10-Q (file no. 1-10767) filed December 12, 1995.10.28**
    
    Sublease and Occupancy Agreement, dated December 15, 1995, between the Company, SSC and SSC, dba Value City
Furniture, re: Louisville, KY (Preston Highway) store. Incorporated by reference to Exhibit 10.46 to Form
10-Q (file no. 1-10767) filed March 19, 1996.10.29**
    
    Agreement of Lease, dated October 4, 1996, between the Company, as tenant, and Hickory Ridge Pavilion, Ltd.,
an affiliate of SSC, as landlord, re: Memphis, TN store. Incorporated by reference to Exhibit 10.50 to Form
10-K (file no. 1-10767) filed November 1, 1996.10.30**
    
    Agreement of Lease, dated October 30, 1998, between the Company, as lessee, and Jubilee Limited Partnership,
an affiliate of SSC, as lessor, re: Calumet City, IL store. Incorporated by reference to Exhibit 10.56 to
Form 10-K (file no. 1-10767) filed April 30, 1999.10.31**
    
    Agreement of Lease, dated September 29, 1998, between the Company, as tenant, and Valley Fair Irvington, LLC,
an affiliate of SSC, as landlord, re: Irvington, NJ. Incorporated by reference to Exhibit 10.57 to Form 10-K
(file no. 1-10767) filed April 30, 1999.10.32
    
    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.
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##### Table of Contents



ExhibitNo.
    
    Description10.35
    
    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, 2001.10.37#
    
    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, 2004.10.38**
    
    Amended and Restated Loan and Security Agreement, dated July 5,
2005, by and among National City Business Credit, Inc., as
Administrative Agent for the ratable benefit of the Revolving
Credit Lenders, National City Business Credit, Inc., as
Collateral Agents for the ratable benefit of the Revolving
Credit Lenders, the Revolving Credit Lenders and Value City
Department Stores LLC (in such capacity, the Lead Borrower),
as agent for the Borrower and collectively the Borrowers.
Incorporated by reference to Exhibit 10.7 to Form 8-K (file no.
1-10767) filed July 11, 2005.10.38.1**
    
    First Amendment to Amended and Restated Loan and Security
Agreement, dated as of August 16, 2006, by and among Value City
Department Stores LLC, as lead borrower, the other borrowers
named therein, the revolving credit lenders party thereto and
National City Business Credit, Inc., as administrative agent and
collateral agent. Incorporated by reference to Exhibit 10.6 to
Form 8-K (file no. 001-10767) filed on August 22, 2006.10.38.2**
    
    Second Amendment to Amended and Restated Loan and Security
Agreement, dated October 3, 2007. Incorporated herein by
reference to Exhibit 10.2 to Form 8-K (file no. 1-10767) filed
October 4, 2007.10.39**
    
    Third Amended and Restated Senior Loan Agreement, dated as of
August 16, 2006, among Value City Department Stores LLC, as
borrower, and Cerberus Partners, L.P., as lender. Incorporated
by reference to Exhibit 10.1 to Form 8-K (file no. 001-10767)
filed on August 22, 2006.10.40**
    
    Third Amended and Restated Senior Loan Agreement, dated as of
August 16, 2006, among Value City Department Stores LLC, as
borrower, and Schottenstein Stores Corporation, as lender.
Incorporated by reference to Exhibit 10.2 to Form 8-K (file no.
001-10767) filed on August 22, 2006.10.41#**
    
    Value City Department Stores, Inc. 2003 Incentive Compensation
Plan. Incorporated by reference to Exhibit 10.41 to Form 10-K
(file no. 1-10767) filed April 14, 2005.10.42#
    
    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, 2004.10.43#
    
    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, 2005.10.44**
    
    Agreement of Lease, dated March 1, 1994, between Jubilee Limited
Partnership, an affiliate of SSC, and Value City Department
Stores, Inc., as modified by First Lease Modification, dated
November 1, 1994, re: Merrilville, IN Value City store.
Incorporated by reference to Exhibit 10.44 to Form 10-K (file
no. 1-10767) filed April 14, 2005.10.45**
    
    Lease Agreement, dated July 7, 1987, by and between
Schottenstein Trustees, an affiliate of SSC, and Schottenstein
Stores Corp. dba Schottensteins Department Store, as modified
by Lease Extension and Modification Agreement, dated March 12,
1998, by and between Schottenstein Trustees and Value City
Department Stores, Inc. dba Schottensteins East Department
Store, re: 6055 E. Main Street, Columbus, OH Value City store.
Incorporated by reference to Exhibit 10.45 to Form 10-K (file
no. 1-10767) filed April 14, 2005.10.46**
    
    Industrial Space Lease  Net, dated May 18, 2000, by and between
4300 East Fifth Avenue LLC, an affiliate of SSC, and Value City
Department Stores, Inc., re: 4320-30 East Fifth Avenue,
Columbus, OH warehouse. Incorporated by reference to Exhibit
10.47 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.
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##### Table of Contents



ExhibitNo.
    
    Description10.47.1
    
    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 Tenanyt
Leasehold Interst 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 Shoe 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.10.56**
    
    Master Store Lease, dated April 25, 1991, by and between SSC and
Value City Department Stores, Inc., as modified by First
Amendment to Master Store Lease, dated February 3, 1992, and
Second Amendment to Master Store Lease, dated March 18, 2005, by
and between SSC and Value City Department Stores LLC and Value
City of Michigan, Inc., re: 4
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##### Table of Contents



ExhibitNo.
    
    Descriptionstore locations (Clarksville, IN,
Springdale, OH, Louisville, KY (Dixie Highway), and Beckley,
WV). Incorporated by reference to Exhibit 10.57 to Form 10-K
(file no. 1-10767) filed April 14, 2005.10.57
    
    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, 2005.10.59**
    
    Lease Agreement, dated March 18, 2005, by and between SSC and Value City of Michigan, Inc., re: Flint, MI DSW
store. Incorporated by reference to Exhibit 10.60 to Form 10-K (file no. 1-10767) filed April 14, 2005.10.60**
    
    Lease Agreement, dated September 2, 1997, by and between SSC-Barboursville, L.L.C., an affiliate of SSC, and
Value City Department Stores, Inc. Incorporated by reference to Exhibit 10.61 to Form 10-K (file no. 1-10767)
filed April 14, 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, 2005.10.64**
    
    Master Sublease, dated April 25, 1991, between the Company, as sublessee, and SSC, as sublessor, re: two
stores (Covington, KY and Greenwood, IN). Incorporated by reference to Exhibit 10.11 to Registration
Statement on Form S-1 (file no. 33-402144) filed April 29, 1991.10.65#
    
    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, 2004.10.66**
    
    Lease Agreement, dated November 5, 1992, by and between Value City Department Stores, Inc. (successor to SSC
d/b/a Elyria Value City Shopping Center), as sublessor, and SSC d/b/a Value City Furniture #17, as sublessee,
as modified by Sublease Extension and Modification Agreement, dated October 11, 2001, re: Elyria, OH store.
Incorporated by reference to Exhibit 10.67.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12,
2005.10.67**
    
    Agreement of Lease, dated March 6, 1996, between Value City of Michigan, Inc. (assignee of MRSLV Saginaw,
L.L.C.), as sublessor, and SSC d/b/a Value City Furniture, as sublessee, re: Saginaw Michigan store.
Incorporated by reference to Exhibit 10.68.1 to Form 10-K/A Amendment No. 2 (file no. 1-10767) filed May 12,
2005.10.68
    
    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, 2005.10.70**
    
    License Agreement, dated August 30, 2002, by and between Value City Department Stores, Inc. and Shonac
Corporation, re: Merrillville, IN DSW store. Incorporated by reference to Exhibit 10.1 to Form 10-Q (file no.
1-10767) filed September 13, 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.
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##### Table of Contents



ExhibitNo.
    
    Description10.74#
    
    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,
2006.10.76
    
    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, 2008.10.89
    
    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, 2007.10.89.1
    
    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.10.91*
    
    Supply Agreement (Combo Stores), effective as of January 30, 2005, between DSW Inc. and Filenes Basement Inc.
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##### Table of Contents



ExhibitNo.
    
    Description10.92*
    
    Assignment and Assumption of Lease, effective January 15, 2008, between Retail Ventures, Inc., American
Signature, Inc., an affiliate of SSC and SSC  Alum Creek, LLC, an affiliate of SSC.12*
    
    Ratio of Earnings to Fixed Charges21*
    
    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.**
    
    Indicates an agreement or contract relating to the Companys Value City Department Stores
business segment. Effective January 23, 2008, the Company disposed of an 81% ownership
interest in its Value City segment to VCHI Acquisition Co. E-8