874444--4/25/2008--RETAIL_VENTURES

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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. 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. Retail Ventures is a holding company and relies on its subsidiaries to make payments on its indebtedness and meet its obligations. 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. Filene s Basement and DSW s secured revolving credit facilities could limit operational flexibility. Our stock price may fluctuate significantly, which could negatively affect the trading of our common shares. 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. 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. 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. 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. 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. 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. 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. 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.

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874444--4/25/2008--RETAIL_VENTURES_INC