883943--5/15/2008--CHRISTOPHER_&_BANKS

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Set forth below are certain of the important risks that we face and that could cause actual results to differ materially from the forward-looking statements or information in this document. Please also see the Statement Regarding Forward-Looking Disclosures in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations. The current state of the U.S. economy has and can be expected to have a material negative impact on consumer purchases of discretionary items, such as women s apparel, which in turn can have a material adverse impact on the Company s level of sales and profitability. Many factors affect the level of consumer spending in the apparel industry, including: The industry in which we operate can be cyclical. Because apparel purchases are generally discretionary, declines in consumer spending patterns may impact us more negatively as an apparel retailer. Therefore, we may not be able to maintain our recent revenue or operating income levels if there is a decline in consumer spending patterns, and we may decide to slow or alter our growth plans. The Company may not be able to successfully reposition its Acorn segment. The Company acquired the Acorn concept in November 2004. Acorn sales and operating results have not met management s expectations. In fiscal 2008, the Company recorded an impairment charge of $6.5 million related to the impairment of long-lived assets of the Acorn stores and a $3.6 million goodwill impairment charge. The realization of revenue growth and improved merchandise and operating margins related to Acorn will depend largely upon the Company s ability to: There can be no assurance that the Company can successfully execute any of the actions above or that the Company s strategies for the Acorn brand will achieve the results necessary to generate positive operating results, particularly in this challenging economic environment. If the Company fails to improve Acorn s operations or cannot successfully execute its growth strategy, the Company s results will be adversely impacted and future impairment or other charges may be recognized. We believe we have benefited substantially from the leadership and strategic guidance of our key executives and members of our creative team, who are primarily responsible for developing our merchandise and reinforcing our brand identity. The loss, for any reason, of the services of any of these individuals could delay the implementation of our strategies. In addition, merchandise we develop without the guidance and direction of these key personnel may not receive the same level of acceptance, thereby resulting in a decline in sales, merchandise margins or both. Our ability to meet our labor needs while controlling our labor costs is subject to external factors such as unemployment levels, minimum wage legislation, health care legislation and changing demographics. In addition, our labor costs are influenced by health care and workers compensation costs, both of which have been rising in recent years. If overall labor costs increase more than anticipated, it could negatively impact our earnings. In fiscal 2008, approximately 78% of our merchandise was directly imported from foreign factories and our 10 largest suppliers accounted for approximately 50% of the merchandise we purchased. Substantially all of the Company s directly imported merchandise is manufactured in Southeast Asia. Purchases from the Company s largest overseas supplier accounted for approximately 18% of total purchases in fiscal 2008. The majority of these goods are produced in China, Hong Kong and Singapore. Sourcing our products abroad poses various risks to our business. We could also be adversely impacted by production delays resulting from various policies adopted by the Peoples Republic of China which seek to minimize pollution by limiting the operation of polluting agents in advance of the Beijing Olympics to be held during August 2008. The cost or availability of raw materials could hurt our profitability. The raw materials used to manufacture our products are subject to availability constraints and price volatility caused by high demand for fabrics, weather, supply conditions, government regulations, economic climate and other unpredictable factors. Increases in the demand for, or the price of, raw materials could hurt our profitability. All of our administrative and distribution operations are housed in a single facility. A significant interruption in the operation of this facility due to natural disasters, accidents or other events could reduce our ability to receive and provide merchandise to our stores as well as reduce our ability to administer and oversee our business, which could reduce our sales and results of operations. Our future office space needs are likely to exceed the capacity of our current facility, which could adversely impact our future operations or cost structure. The office space in our current headquarters facility is fully utilized and limits our ability to add additional staff. If we are unable to locate additional or alternate facilities to adequately address our future office space needs, it may adversely impact our ability to add needed personnel, operate efficiently or provide a conducive work environment, all of which could adversely impact our future operations. In addition, the cost of additional or alternate facilities could negatively impact our future earnings. We sell merchandise over the Internet through our websites, www.christopherandbanks.com and www.cjbanks.com. Our e-commerce operations are subject to numerous risks, including: There is no assurance that our e-commerce operations will meet our sales and profitability plans. The use of individually identifiable data by our business and our business associates is regulated at the federal and state levels. Privacy and information security laws and regulations change, and compliance with them may result in cost increases due to necessary systems changes and the development of new administrative processes. If we or our business associates fail to comply with these laws and regulations or experience a data security breach, our reputation could be damaged, possibly resulting in lost future business, and we could be subjected to additional legal risk as a result of such non-compliance. Threat of terrorists attacks or actual terrorist events in the United States and worldwide could disrupt the production, shipment or receipt of our merchandise or lead to lower client traffic in regional shopping centers. Natural disasters could also impact our ability to open and run our stores in affected areas. Lower customer traffic due to security concerns, war or the threat of war and natural disasters could result in decreased sales that would have a material adverse impact on our business, financial condition and results of operations.

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883943--5/15/2008--CHRISTOPHER_&_BANKS_CORP