Retail Ventures, Inc., parent of DSW Shoe Warehouse, reported that net sales for the fourth quarter ended January 29 increased 5.8% to $761.9 million from $720.4 million in the year-ago period. Total company comparable store sales for the thirteen-week period decreased 1.7% when compared to the same period last year. The net loss for the quarter was $16.9 million, or 50 cents per diluted share, compared to net income of $11.3 million, or 24 cents per diluted share, in Q4 last year.

For the full year, net sales increased 5.6% to $2.7 billion, compared to $2.6 billion for the fiscal year ended January 31, 2004. The company's same store sales decreased 1.0% for the fiscal year. The net loss for the year was $19.5 million, or a loss of 57 cents per diluted share, compared to a net loss of $5.2 million, or 15 cents per diluted share, in the prior year.

Like many companies in the retail industry, after reviewing its accounting for leasing transactions, the Company restated its consolidated balance sheet at January 31, 2004, and the consolidated statements of operations and cash flows for the years ended January 31, 2004 and February 1, 2003, to correct certain errors in its accounting for two types of leasing transactions. First, the Company's statements of cash flows reflected construction allowances received as a reduction of capital expenditures (within “investing” cash flows) rather than as an operating lease activity (within “operating” cash flows). Second, the Company had excluded the build-out period of its stores from its straight line rent expense calculations. The impact of the restatement for each of the periods was an increase in the net loss of $0.8 million in each of fiscal 2003 and 2002.

For the 2004 fiscal year, the net loss includes items that the Company believes are not directly related to its ongoing operations. Therefore, the Company is providing supplemental adjusted results that exclude these items. These non-GAAP financial measures should facilitate analysis by investors and others who follow the Company's financial performance. The items, presented net of tax, are: (1) severance accruals of $8.4 million recorded in the fourth quarter of 2004 attributable to executives no longer with the Company and a workforce reduction in the Value City and services operations, (2) the non- cash write-off of the goodwill for Filene's Basement, Inc. of $6.9 million in the fourth quarter of 2004, (3) store closing costs of $1.1 million recorded in the fourth quarter of 2004 for two underperforming Value City stores, and (4) impairment of store assets of $0.6 million recorded in the fourth quarter and an additional $0.4 million impairment recorded earlier in 2004. Excluding these items, on a Non-GAAP basis, the net income for the fourth quarter was $0.1 million, or breakeven per share on a diluted basis, and for fiscal year 2004 the net loss was $2.1 million, or $0.06 per share on a diluted basis.

A reconciliation of Non-GAAP results follows:


                                           Fourth
                                          Quarter     EPS    Fiscal     EPS
                                            2004              2004
                                       (in millions, except per share amounts)

     Non-GAAP net income (loss)             $0.1       $--    $(2.1)  $(0.06)

     Impairments and other charges
      (net of tax):
       Severance accruals                   (8.4)    (0.25)    (8.4)   (0.25)
       Write-off of Filene's Basement
        goodwill                            (6.9)    (0.20)    (6.9)   (0.20)
       Store closing charges                (1.1)    (0.03)    (1.1)   (0.03)
       Impairment of store assets           (0.6)    (0.02)    (1.0)   (0.03)
     Total special items                   (17.0)    (0.50)   (17.4)   (0.51)

     GAAP net loss                        $(16.9)   $(0.50)  $(19.5)  $(0.57)


                            RETAIL VENTURES, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (Dollars in thousands, except per share amounts)
                                 (Unaudited)

                            Thirteen Weeks Ended      Fifty-two Weeks Ended
                           January 29,  January 31,  January 29,  January 31,
                              2005         2004         2005         2004
                                        (restated)                (restated)

    Net sales                $761,939     $720,441   $2,739,631   $2,594,206
    Cost of sales             484,484      433,923    1,663,215    1,593,214
    Gross profit              277,455      286,518    1,076,416    1,000,992
    Selling, general and
     administrative expenses  298,213      259,849    1,076,445      974,944
    License fees and other
     operating income           1,641        1,364        6,714        5,610
    Operating (loss) profit   (19,117)      28,033        6,685       31,658
    Interest expense, net       9,314        9,372       38,561       38,595
    (Loss) income before
     benefit (provision)
     for income taxes         (28,431)      18,661      (31,876)      (6,937)
    Benefit (provision) for
     income taxes              11,517       (7,381)      12,428        1,718
    Net (loss) income        $(16,914)     $11,280     $(19,448)     $(5,219)

    Shares used in per share
     calculations:
      Basic                    34,084       33,799       33,956       33,753
      Diluted                  34,084       52,173       33,956       33,753

    Basic (loss) earnings
     per share                 $(0.50)       $0.33       $(0.57)      $(0.15)

    Diluted (loss) earnings
     per share                 $(0.50)       $0.24       $(0.57)      $(0.15)

    Same store sales:
      Value City Department
       Stores                    (4.9)%       (1.3)%       (4.9)%       (0.7)%
      DSW Shoe Warehouse          5.8         11.0          4.8          5.6
      Filene's Basement           0.8          8.1          5.0          2.6
    Total                        (1.7)%        2.0%        (1.0)%        1.2%

    Store count at end of period:
      Value City Department Stores                          116          116
      DSW Shoe Warehouse                                    172          142
      Filene's Basement                                      26           21
    Total                                                   314          279