Retail Ventures Cuts Q2 Loss on 2.7% Sales Increase

Retail Ventures, Inc. net sales for the second quarter increased 2.7% to $684.5 million from $666.7 million in 2005, a $17.8 million increase. The Company’s comparable store sales for the quarter increased 0.6% when compared to the same period last year. The net loss for the quarter was $16.0 million, or (36) cents per share on a diluted basis, compared to a net loss of $157.3 million, or $(4.03) per share on a diluted basis last year.

                           Thirteen weeks ended    Twenty-six weeks ended
                           July 29,     July 30,     July 29,     July 30,
                              2006         2005         2006         2005
    Total Sales (in thousands):
     Value City Department
      Stores              $290,362     $301,170     $604,789     $612,625
     DSW                   301,302      276,211      617,789      558,017
     Filene's Basement      92,844       89,353      183,443      176,137
                          $684,508     $666,734   $1,406,021   $1,346,779



    Comparable Sales Percentage:
     Value City Department
      Stores                  (2.2)%       (4.8)%        0.2%        (6.4)%
     DSW                       2.2          3.3          3.2          3.9
     Filene's Basement         5.4          1.6          5.0          1.8
                               0.6%        (1.1)%        2.1%        (1.8)%

The Company believes that the non-cash accounting charge associated with the change in fair value of warrants is not directly related to its retail operations and is therefore providing supplemental adjusted results that exclude this item. This non-GAAP financial measure should facilitate analysis by investors and others who follow the Company’s financial performance. A reconciliation of non-GAAP results follows:

                            Thirteen weeks ended     Twenty-six weeks ended
                            July 29,     July 30,      July 29,     July 30,
                               2006         2005          2006         2005
                                              (in thousands)
    Operating loss:
     Non GAAP operating
      profit (loss)         $11,818      $(2,182)      $26,481     $(11,614)
     Change in fair value
      of warrants           (15,343)    (137,583)      (80,152)    (137,583)
     GAAP operating loss    $(3,525)   $(139,765)     $(53,671)   $(149,197)



                            Thirteen weeks ended     Twenty-six weeks ended
                            July 29,     July 30,      July 29,     July 30,
                               2006         2005          2006         2005
                                  (in thousands, except per share amounts)

    Net loss:
     Non GAAP net loss        $(658)    $(19,668)        $(797)    $(31,127)
     Change in fair value
      of warrants           (15,343)    (137,583)      (80,152)    (137,583)
     GAAP net loss         $(16,001)   $(157,251)     $(80,949)   $(168,710)



    Basic and diluted loss per share:
     Non GAAP basic and diluted
      loss per share         $(0.02)      $(0.50)       $(0.02)      $(0.83)
     Change in fair value
      of warrants             (0.34)       (3.53)        (1.86)       (3.66)
     GAAP basic and diluted
      loss per share         $(0.36)      $(4.03)       $(1.88)      $(4.49)