Retail Ventures announced that DSW Inc., its wholly-owned subsidiary, will pursue an initial public offering. DSW filed its initial registration statement with the U.S. Securities and Exchange Commission. RVI expects that DSW will complete the IPO in the first half of 2005, subject to market conditions. Lehman Brothers is acting as book-running manager of the offering with CIBC World Markets and Johnson Rice acting as co-managers.

DSW will use a portion of the proceeds from the IPO to repay intercompany indebtedness owed to RVI. The amount of the proceeds that RVI receives will depend on market conditions and other factors. RVI believes the proceeds will strengthen its balance sheet and improve debt coverage. RVI will use these funds to pay down its $100 million term loan facility and a portion of its revolving credit facility, which it will refinance at the time of the IPO. As a result of reduced debt service costs, RVI will be in a better position to implement its new business plan after the IPO. Among other things, the plan focuses on improving the merchandise presentation at Value City Department Stores by offering value in current styles in an updated store environment with the goal of reestablishing and freshening the stores' consumer appeal.

After the IPO, RVI expects to own a majority of the outstanding common shares of DSW. Prior to the IPO, RVI will enter into agreements with DSW related to the separation of its business from DSW, including a master separation agreement, a shared services agreement and a tax separation agreement. RVI's current intent is to continue to hold its DSW common shares following the offering. However, other than with respect to a customary 180 day lock up period following the IPO, RVI is not subject to any contractual obligation to retain its controlling interest.