<SUBMISSION>
<ACCESSION-NUMBER>0000950123-09-011453
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>9
<PERIOD>20090502
<FILING-DATE>20090604
<DATE-OF-FILING-DATE-CHANGE>20090604
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DSW Inc.
<CIK>0001319947
<ASSIGNED-SIC>5661
<IRS-NUMBER>310746639
<STATE-OF-INCORPORATION>OH
<FISCAL-YEAR-END>0129
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-32545
<FILM-NUMBER>09874733
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>4150 EAST 5TH AVENUE
<CITY>COLUMBUS
<STATE>OH
<ZIP>43219
<PHONE>(614) 237-7100
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>4150 EAST 5TH AVENUE
<CITY>COLUMBUS
<STATE>OH
<ZIP>43219
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>l36650ae10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>FORM 10-Q</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-Q</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the quarterly period ended May&nbsp;2, 2009
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>OR</B></DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the transition period from&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;to&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission File Number </B><U><B>1-32545</B></U></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><FONT STYLE="BORDER-BOTTOM: 1PX SOLID #000000; width: 300px"><B>DSW INC.</B></FONT>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Ohio
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">31-0746639</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Incorporation or organization)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">810 DSW Drive, Columbus, Ohio
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">43219</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(614)&nbsp;237-7100<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Registrant&#146;s telephone number, including area code</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">N/A<DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Former name, former address and former fiscal year, if changed since last report)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed
by Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months
(or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90&nbsp;days.&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule&nbsp;405 of Regulation&nbsp;S-T
(&#167;232.405 of this chapter) during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to submit and post such files).&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of &#147;accelerated filer and large
accelerated filer&#148; in Rule&nbsp;12b-2 of the Exchange Act. (Check one):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><TABLE width="100%" style="font-size: 10pt; margin-top: 0pt"><TR><TD>Large accelerated filer&nbsp;<FONT face="Wingdings">&#111;</FONT></TD><TD align="center">Accelerated filer&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;</TD><TD align="center"><br>Non-accelerated filer&nbsp;<FONT face="Wingdings">&#111;</FONT><BR>(Do not check if smaller reporting company)</TD><TD align="right">Smaller reporting company&nbsp;<FONT face="Wingdings">&#111;</FONT>
</TD></TR></TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the Exchange Act).
<FONT face="Wingdings">&#111;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The number
of outstanding Class&nbsp;A Common Shares, without par value, as of
May&nbsp;31, 2009 was 16,317,249 and
Class&nbsp;B Common Shares, without par value, as of May&nbsp;31, 2009 was 27,702,667.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">







<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Item No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">Part I. Financial Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#102">Item&nbsp;1. Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><A href="#103">Condensed Consolidated Balance Sheets at May&nbsp;2, 2009 and January&nbsp;31, 2009</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><A href="#104">Condensed Consolidated Statements of Income for the three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><A href="#105">Condensed Consolidated Statements of Shareholders&#146; Equity for three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><A href="#106">Condensed Consolidated Statements of Cash Flows for three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px"><A href="#107">Notes to the Condensed Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#108">Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#109">Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#110">Item&nbsp;4. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Part II. Other Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#112">Item&nbsp;1. Legal Proceedings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#113">Item&nbsp;1A. Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#114">Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#115">Item&nbsp;3. Defaults Upon Senior Securities</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#116">Item&nbsp;4. Submission of Matters to a Vote of Security Holders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#117">Item&nbsp;5. Other Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px"><A href="#118">Item&nbsp;6. Exhibits</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#119">Signature</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#120">Index to Exhibits</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv10w23.htm">EX-10.23</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv10w23w1.htm">EX-10.23.01</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv10w23w2.htm">EX-10.23.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv10w23w6.htm">EX-10.23.6</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv31w1.htm">EX-31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv31w2.htm">EX-31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv32w1.htm">EX-32.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l36650aexv32w2.htm">EX-32.2</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1&nbsp;<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="101"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Part&nbsp;I. FINANCIAL INFORMATION</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 0pt"><B>Item&nbsp;1. Financial Statements</B>
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
CONDENSED CONSOLIDATED BALANCE SHEETS<BR>
(in thousands, except share amounts)<BR>
(unaudited)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>May 2,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>January 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:60px; text-indent:-15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">54,782</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short-term investments, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101,404</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,851</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts receivable from related parties, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">336</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">244,008</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaid expenses and other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,790</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,876</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">495,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">454,047</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">233,366</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,899</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tradenames and other intangibles, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,668</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,217</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">757,583</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">721,197</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center"><DIV style="margin-left:45px; text-indent:-15px"><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">116,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">92,912</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable to related parties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,299</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued expenses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,971</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,228</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gift cards and merchandise credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,491</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,945</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,425</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">185,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158,326</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes and other non-current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,287</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Shareholders&#146; equity:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Class&nbsp;A Common Shares, no par value; 170,000,000 authorized; 16,317,249 and 16,315,746
issued and outstanding, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">295,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">294,222</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Class&nbsp;B Common Shares, no par value; 100,000,000 authorized; 27,702,667 and 27,702,667
issued and outstanding, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred Shares, no par value; 100,000,000 authorized; no shares issued or outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">179,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172,017</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(904</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">473,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">465,584</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities and shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">757,583</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">721,197</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME<BR>
(in thousands, except per share amounts)<BR>
(unaudited)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Three months ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>May 2, 2009</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>May 3, 2008</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">366,264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(280,865</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(269,217</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,047</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(92,878</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(81,041</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(183</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(274</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">997</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">723</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other-than-temporary impairment charge on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(395</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,729</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax provision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,817</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,441</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic and diluted earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares used in per share calculations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,966</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,149</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146; EQUITY<BR>
(in thousands)<BR>
(unaudited)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Class A</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Class B</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Class A</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Class B</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Retained</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Earnings</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Loss</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance, February&nbsp;2, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">288,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">145,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">433,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized loss on
available-for-sale securities,
net of tax benefit of $82</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(127</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(127</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><I>Total comprehensive income</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><I>10,161</I></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock units granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock based compensation expense,
before related tax effects</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance, May&nbsp;3, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">289,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">155,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(127</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444,766</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance, January&nbsp;31, 2009</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">294,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">172,017</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">465,584</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,145</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized loss on
available-for-sale securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(249</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(249</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><I>Total comprehensive income</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><I>6,896</I></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock units granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock based compensation expense,
before related tax effects</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,281</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Balance, May&nbsp;2, 2009</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">295,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">179,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(904</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">473,778</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The accompanying Notes are an integral part of the Condensed Consolidated Financial Statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(in thousands)<BR>
(unaudited)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Three months ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>May 2, 2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>May 3, 2008</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,288</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments to reconcile net income to net cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,498</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of debt issuance costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock based compensation expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,769</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(668</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss on
disposal of long-lived assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Impairment charges on long-lived assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">730</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other-than-temporary impairment charges on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Grants of stock units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(468</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,855</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in working capital, assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,102</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,574</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34,221</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,760</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">804</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,854</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from construction and tenant allowances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,253</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,152</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,177</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash flows from investing activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash paid for property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8,069</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,499</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchases of available-for-sale investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(9,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Maturities and sales from available-for-sale investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,805</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">46,306</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase in cash and equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,483</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and equivalents, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61,801</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and equivalents, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">118,284</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Supplemental disclosures of cash flow information:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash paid during the period for income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">99</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Noncash investing and operating activities &#151;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Increase (decrease)&nbsp;in accounts payable and
accrued expenses from asset purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(2,837</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The accompanying Notes are an integral part of the Condensed Consolidated Financial
Statements
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Basis of Presentation&#151; </I></B>The accompanying unaudited condensed consolidated interim financial
statements should be read in conjunction with the Company&#146;s Annual Report on Form 10-K as filed
with the Securities and Exchange Commission (&#147;SEC&#148;) on April&nbsp;1, 2009 (the &#147;2008 Annual Report&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the opinion of management, the unaudited condensed consolidated interim financial statements
reflect all adjustments, consisting of normal recurring adjustments, which are necessary to
present fairly the consolidated financial position, results of operations and cash flows for the
periods presented.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Business Operations&#151; </I></B>DSW Inc. (&#147;DSW&#148;) and its wholly-owned subsidiaries are herein referred to
collectively as DSW or the &#147;Company&#148;. DSW&#146;s Class&nbsp;A Common Shares are listed on the New York
Stock Exchange trading under the ticker symbol &#147;DSW&#148;. At May&nbsp;2, 2009, Retail Ventures, Inc.
(&#147;RVI&#148; or &#147;Retail Ventures&#148;) owned approximately 62.9% of DSW&#146;s outstanding Common Shares,
representing approximately 93.1% of the combined voting power of DSW&#146;s outstanding Common
Shares.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of May&nbsp;2, 2009, DSW operated a total of 303 stores located throughout the United States and
dsw.com. DSW stores and dsw.com offer a wide selection of better-branded dress, casual and
athletic footwear for men and women, as well as accessories. During the three months ended May
2, 2009, DSW opened five new DSW stores. DSW also operates leased departments for four retailers
in its leased department segment. As of May&nbsp;2, 2009, DSW supplied merchandise to 274 Stein Mart
stores, 65 Gordmans stores, 25 Filene&#146;s Basement stores and one Frugal Fannie&#146;s store. During
the three months ended May&nbsp;2, 2009, DSW added one leased department and ceased operations in 13
leased departments. DSW owns the merchandise, records sales of merchandise net of returns and
sales tax, owns the fixtures (except for Filene&#146;s Basement) and provides supervisory assistance
in these locations. Stein Mart, Gordmans, Filene&#146;s Basement and Frugal Fannie&#146;s provide the
sales associates. DSW pays a percentage of net sales as rent.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Allowance for Doubtful Accounts</I></B><B>&#151; </B>The Company monitors its exposure for credit losses and records
related allowances for doubtful accounts. Allowances are estimated based upon specific accounts
receivable balances, where a risk of default has been identified. As of May&nbsp;2, 2009 and January
31, 2009, the Company&#146;s allowance for doubtful accounts was $1.3&nbsp;million and $0.8&nbsp;million,
respectively. The increase in the allowance is primarily related to the collectability of a
receivable from Filene&#146;s Basement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Inventories&#151; </I></B>Merchandise inventories are stated at net realizable value, determined using the
first-in, first-out basis, or market, using the retail inventory method. The retail method is
widely used in the retail industry due to its practicality. Under the retail inventory method,
the valuation of inventories at cost and the resulting gross profits are calculated by applying
a calculated cost to retail ratio to the retail value of inventories. The cost of the inventory
reflected on the balance sheet is decreased by charges to cost of sales at the time the retail
value of the inventory is lowered through the use of markdowns, which are reductions in prices
due to customers&#146; perception of value. Hence, earnings are negatively impacted as the
merchandise is marked down prior to sale.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inherent in the calculation of inventories are certain significant management judgments and
estimates, including setting the original merchandise retail value or mark-on, markups of
initial prices established, markdowns, and estimates of losses between physical inventory
counts, or shrinkage, which combined with the averaging process within the retail method, can
significantly impact the ending inventory valuation at cost and the resulting gross profit. At
May&nbsp;2, 2009, the reserve to value inventory at lower of cost or market was $4.7&nbsp;million. At
January&nbsp;31, 2009, the reserve was immaterial.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Tradenames and Other Intangible Assets, net&#151; </I></B>Tradenames and other intangible assets are
comprised of values assigned to names the Company acquired and leases acquired. The accumulated
amortization for these assets is $9.5&nbsp;million and $9.2&nbsp;million at May&nbsp;2, 2009 and January&nbsp;31,
2009, respectively.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The asset value and accumulated amortization of intangible assets is as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">May 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">January 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><U>Not
subject to amortization</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Domain names</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><U>Subject
to amortization</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tradenames:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,350</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,138</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Subtotal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,612</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Favorable leases:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&nbsp;140</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(106</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(105</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Subtotal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tradenames and other intangible assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,668</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amortization expense for the first quarter of fiscal 2009 was $0.2&nbsp;million. Amortization
associated with the net carrying amount of intangible assets at May&nbsp;2, 2009 is estimated to be
$0.7&nbsp;million for the remainder of fiscal 2009, $0.9&nbsp;million
for each fiscal year from fiscal 2010 through fiscal
2012 and $0.2&nbsp;million in fiscal 2013.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Customer Loyalty Program&#151; </I></B>The Company maintains a customer loyalty program for the DSW stores
and dsw.com in which program members earn reward certificates that result in discounts on future
purchases. Upon reaching the target-earned threshold, the members receive reward certificates
for these discounts which must be redeemed within six months. The Company accrues the
anticipated redemptions of the discount earned at the time of the initial purchase. To estimate
these costs, DSW is required to make assumptions related to customer purchase levels and
redemption rates based on historical experience. The accrued liability as of May&nbsp;2, 2009 and
January&nbsp;31, 2009 was $7.7&nbsp;million and $7.3&nbsp;million, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Deferred Rent&#151; </I></B>Many of the Company&#146;s operating leases contain predetermined fixed increases of
the minimum rentals during the initial lease terms. For these leases, the Company recognizes the
related rental expense on a straight-line basis over the original terms of the lease. The
Company records the difference between the amount charged to expense and the rent paid as
deferred rent and begins amortizing such deferred rent upon the delivery of the lease location
by the lessor. The deferred rent included in the other non-current liabilities caption was $32.5
million and $31.9&nbsp;million as of May&nbsp;2, 2009 and January&nbsp;31, 2009, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Construction and Tenant Allowances&#151; </I></B>The Company receives cash allowances from landlords, which
are deferred and amortized on a straight-line basis over original terms of the lease as a
reduction of rent expense. Construction and tenant allowances are included in the caption other
non-current liabilities and were $64.2&nbsp;million and $63.7&nbsp;million as of May&nbsp;2, 2009 and January
31, 2009, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Accumulated Other Comprehensive Loss&#151; </I></B>Accumulated other comprehensive loss of $0.9&nbsp;million and
$0.7&nbsp;million at May&nbsp;2, 2009 and January&nbsp;31, 2009,
respectively, relates to the Company&#146;s unrealized losses on
available-for-sale securities. The Company believes that it is more likely than not that it
would not be able to utilize any related deferred tax asset and recorded a full valuation
allowance against the related deferred tax assets at May&nbsp;2, 2009 and January&nbsp;31, 2009. For the
three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008, total comprehensive income was $6.9&nbsp;million and
$10.2&nbsp;million, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Sales and Revenue Recognition&#151; </I></B>Revenues from merchandise sales are recognized upon customer
receipt of merchandise, are net of returns and sales tax and are not recognized until
collectability is reasonably assured. For dsw.com, the Company estimates a time lag for
shipments to record revenue when the customer receives the goods. Net sales also include revenue
from shipping and handling while the related costs are included in cost of sales.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Revenue from gift cards is deferred and recognized upon redemption of the gift card. The
Company&#146;s policy is to recognize income from breakage of gift cards when the likelihood of
redemption of the gift card is remote. The Company recognized</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$0.2&nbsp;million and $0.1&nbsp;million as miscellaneous income from gift card breakage during the three
months ended May&nbsp;2, 2009 and May&nbsp;3, 2008, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Cost of Sales&#151; </I></B>In addition to the cost of merchandise, the Company includes in the cost of sales
expenses associated with warehousing (including depreciation), distribution and store occupancy
(excluding depreciation). Warehousing costs are comprised of labor, benefits and other
labor-related costs associated with the operations of the distribution and fulfillment centers.
The non-labor costs associated with warehousing include rent, depreciation, insurance,
utilities, maintenance and other operating costs that are passed to the Company from the
landlord. Distribution costs include the transportation of merchandise to the distribution and
fulfillment centers and from the distribution center to the Company&#146;s stores. Store occupancy
costs include rent, utilities, repairs, maintenance, insurance, janitorial costs and
occupancy-related taxes, which are primarily real estate taxes passed to the Company by its
landlords.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Operating Expenses</I></B><B>&#151; </B>Operating expenses include expenses related to store management and store
payroll costs, advertising, leased department operations, store depreciation and amortization,
pre-opening advertising and other pre-opening costs (which are expensed as incurred) and
corporate expenses. Corporate expenses include expenses related to buying, information
technology, depreciation expense for corporate cost centers, marketing, legal, finance, outside
professional services, customer service center expenses, allocable costs to and from Retail
Ventures, payroll and benefits for associates and payroll taxes. Corporate level expenses are
primarily attributable to operations at the corporate offices in Columbus, Ohio.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Income Taxes</I></B><B>&#151; </B>Income taxes are accounted for using the asset and liability method as required by
Financial Accounting Standards Board (&#147;FASB&#148;) Statement No.&nbsp;109, <I>Accounting for Income Taxes</I>
(&#147;FAS 109&#148;). Under this method, deferred income taxes arise from temporary differences between
the tax bases of assets and liabilities and their reported amounts in the financial statements.
A valuation allowance is established against deferred tax assets when it is more likely than not
that some portion or all of the deferred tax assets will not be realized.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Recent Accounting Pronouncements</I></B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In February&nbsp;2008, the FASB issued FASB Staff Position 157-2, <I>Effective Date of FASB Statement
No.&nbsp;157</I>, (&#147;FSP 157-2&#148;), which delays the effective date of FASB Statement No.&nbsp;157, <I>Fair Value
Measurements </I>(&#147;FAS 157&#148;) for non-financial assets and liabilities that are recognized or
disclosed in the financial statements on a nonrecurring basis to fiscal years beginning after
November&nbsp;15, 2008. FAS 157, which defines fair value, establishes a framework for measuring fair
value under generally accepted accounting principles (&#147;GAAP&#148;) and expands disclosures about fair
value measurements. The Company adopted FSP 157-2 effective February&nbsp;1, 2009. Refer to Note 5
for additional information regarding the Company&#146;s fair value measurements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In April&nbsp;2008, the FASB issued FSP FAS 142-3, <I>Determination of the Useful Life of Intangible
Assets </I>(&#147;FSP 142-3&#148;), which is effective for fiscal years beginning after December&nbsp;15, 2008. FSP
142-3 removes the requirement under FASB Statement No.&nbsp;142, <I>Goodwill and Other Intangible Assets</I>
to consider whether an intangible asset can be renewed without substantial cost or material
modifications to the existing terms and conditions, and replaces it with a requirement that an
entity consider its own historical experience in renewing similar arrangements. The Company was
required to adopt FSP 142-3 on February&nbsp;1, 2009. The adoption of FSP 142-3 did not have an
impact on the Company&#146;s consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In June&nbsp;2008, the FASB issued FSP Emerging Issues Task Force No.&nbsp;03-6-1 (&#147;FSP EITF 03-6-1&#148;),
&#147;<I>Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities</I>.&#148; FSP EITF 03-6-1 addresses whether instruments granted in share-based payment
transactions are participating securities prior to vesting and, therefore, need to be included
in the earnings allocation in computing earnings per share. The Company was required to adopt
FSP EITF 03-6-1 on February&nbsp;1, 2009. The adoption of FSP EITF 03-6-1 did not have an impact on
the Company&#146;s consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In April&nbsp;2009, the FASB issued FSP FAS 157-4, <I>Determining Fair Value when the Volume and Level
of Activity for the Asset or Liability have Significantly Decreased and Identifying Transactions
that are not Orderly </I>(&#147;FSP 157-4&#148;), which the Company will adopt for the quarter ended August&nbsp;1,
2009. FSP 157-4 affirms that the objective of fair value when the market for an asset is not
active is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date under current market
conditions. The FSP provides guidance for estimating fair value when the volume and level of
market activity for an asset or liability have significantly decreased and determining whether a
transaction was orderly. This FSP applies to all fair value measurements when appropriate. The
Company does not expect that the adoption of this statement will have a significant impact on
its consolidated financial statements.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In April&nbsp;2009, the FASB issued FSP FAS 115-2 and FAS 124-2, <I>Recognition and Presentation of
Other-Than-Temporary Impairments </I>(&#147;FSP 115-2&#148;), which the Company will adopt for the quarter
ended August&nbsp;1, 2009. FSP 115-2 amends existing guidance for determining whether an
other-than-temporary impairment of debt securities has occurred. FSP 115-2 replaces the existing
requirement that an entity&#146;s management assert it has both the intent and ability to hold an
impaired security until recovery with a requirement that management assert (a)&nbsp;it does not have
the intent to sell the security, and (b)&nbsp;it is more likely than not it will not have to sell the
security before recovery of its cost basis. The Company does not expect that the adoption of
this statement will have a significant impact on its consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In April&nbsp;2009, the FASB issued FSP FAS 107-1 and APB 28-1, <I>Interim Disclosures about Fair Value
of Financial Instruments </I>(&#147;FSP 107-1&#148;), which the Company will adopt for the quarter ended
August&nbsp;1, 2009. FSP 107-1 requires an entity to provide the annual disclosures required by FASB
Statement No.&nbsp;107, <I>Disclosures about Fair Value of Financial Instruments</I>, in its interim
financial statements. The Company does not expect that the adoption of this statement will have
a significant impact on its consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>RELATED PARTY TRANSACTIONS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Schottenstein Stores Corporation (&#147;SSC&#148;)&#151; </I></B>The Company leases certain store, office space and
distribution center locations owned by entities affiliated with SSC. Accounts receivable from
and payable to affiliates principally result from commercial transactions with entities owned or
affiliated with SSC or intercompany transactions with SSC. Settlement of related party
receivables and payables are in the form of cash. These transactions settle normally in 30 to 60
days. These related party balances at May&nbsp;2, 2009 and January&nbsp;31, 2009, were related party
receivables of $0.1&nbsp;million and $0.3&nbsp;million, respectively, and related party payables of $0.6
million and $0.7&nbsp;million, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>RVI and Filene&#146;s Basement&#151; </I></B>On April&nbsp;21, 2009, Retail Ventures disposed of its Filene&#146;s Basement
subsidiary to FB II Acquisition Corp., a newly formed entity owned by the Buxbaum Group. As a
result of this disposal, Filene&#146;s Basement is no longer a related party and after this date
balances are no longer related party balances. Accounts payable to RVI of $3.6&nbsp;million and $3.4
million at May&nbsp;2, 2009 and January&nbsp;31, 2009, respectively, were related to usage of RVI&#146;s net
operating losses under the Tax Separation Agreement and shared services. At January&nbsp;31, 2009,
accounts receivable from Filene&#146;s Basement of $1.8&nbsp;million was included in the net related party
payable.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>Value City&#151; </I></B>On January&nbsp;23, 2008, Retail Ventures disposed of an 81% ownership interest in its
Value City operations to VCHI Acquisition Co., a newly formed entity owned by VCDS Acquisition
Holdings, LLC, Emerald Capital Management LLC and Crystal Value, LLC. As a part of this
transaction, RVI agreed to provide certain transition services to Value City. On October&nbsp;26,
2008, Value City filed for bankruptcy protection and announced that it would close its remaining
stores. DSW negotiated an agreement with Value City to continue to provide services post
bankruptcy filing, including risk management, financial services, benefits administration,
payroll and information technology services, in exchange for a weekly payment. DSW received $0.1
million in the first quarter of fiscal 2009 related to services provided post bankruptcy filing.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of May&nbsp;2, 2009, Value City owes DSW approximately $6.7&nbsp;million for services rendered by DSW
prior to Value City&#146;s bankruptcy filing. Of these unpaid amounts, DSW reserved approximately
$0.8&nbsp;million and did not recognize a receivable related to the remaining services provided. DSW
submitted a proof of claim in the bankruptcy proceeding seeking payment in full for all amounts
owed, however, there is no assurance that DSW can collect all or any of the amounts owed.</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>STOCK BASED COMPENSATION</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>DSW has a 2005 Equity Incentive Plan (&#147;the Plan&#148;) that provides for the issuance of equity
awards to purchase up to 7.6&nbsp;million common shares, including stock options and restricted stock
units to management, key employees of DSW and affiliates, consultants (as defined in the Plan)
and directors of DSW. On May&nbsp;21, 2009, subsequent to quarter end, the Company&#146;s shareholders
approved an additional 3.0&nbsp;million common shares for issuance under the Plan for a total of 7.6
million common shares. During the three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008, the Company
recorded stock based compensation expense of approximately $1.3&nbsp;million and $1.1&nbsp;million,
respectively.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Stock Options</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following table summarizes the Company&#146;s stock option activity (in thousands):</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,125</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">927</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(67</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,985</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercisable, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">754</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The weighted-average grant date fair value of each option granted in the three months ended May
2, 2009 and May&nbsp;3, 2008 was $5.06 and $5.86 per share, respectively. The following table
illustrates the weighted-average assumptions used in the Black-Scholes option-pricing model for
options granted in each of the periods presented.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 3, 2008</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumptions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Risk-free interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected volatility of DSW common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">57.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">48.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected option term</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="center">4.9 years</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap align="center">4.9 years</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected dividend yield</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.0</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Restricted Stock Units</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following table summarizes the Company&#146;s restricted stock unit activity (in thousands):</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">226</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">176</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vested
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">395</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The total aggregate intrinsic value of nonvested restricted stock units at May&nbsp;2, 2009 was $4.4
million. As of May&nbsp;2, 2009, the total compensation cost related to nonvested restricted stock
units not yet recognized was approximately $3.1&nbsp;million with a weighted average expense
recognition period remaining of 2.3&nbsp;years. The weighted average exercise price for all
restricted stock units is zero.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Director Stock Units</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>DSW issues stock units to directors who are not employees of DSW or RVI. During the three months
ended May&nbsp;2, 2009 and May&nbsp;3, 2008, DSW granted 1,503 and 2,347 director stock units,
respectively, and expensed less than $0.1&nbsp;million in each respective three month period for
these grants. As of May&nbsp;2, 2009, 84,704 director stock units had been issued and no director
stock units had been settled.</TD>
</TR>

<TR>
    <TD style="font-size: 12pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>INVESTMENTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company determines the appropriate balance sheet classification of its investments at the
time of purchase and evaluates the classification at each balance sheet date. If the Company has
the intent and ability to hold the investments to maturity, investments are classified as
held-to-maturity. Held-to-maturity securities are stated at amortized cost plus accrued
interest. Otherwise, investments are classified as available-for-sale and stated at current
market value.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Short-term investments, net, at May&nbsp;2, 2009 and January&nbsp;31, 2009 includes tax exempt, tax
advantaged and taxable bonds, variable rate demand notes, tax exempt commercial paper,
certificates of deposit, an auction rate security and preferred shares. DSW also participates in
the Certificate of Deposit Account Registry Service<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> (&#147;CDARS&#148;). CDARS provides FDIC
insurance on deposits of up to $50.0&nbsp;million. Certificates of deposit mature every 28 to 91
days. The other types of short-term investments generally have interest reset dates of every 7
days. Despite the long-term nature of the stated contractual maturities of certain short-term
investments, the Company has the ability to quickly liquidate these securities. As a result, the
Company has classified these securities as available-for-sale.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>One auction rate security will undergo auction in November&nbsp;2009. In the first quarter of fiscal
2009, the Company recorded an additional temporary impairment of $0.2&nbsp;million related to this
security. The impairment recorded in the first quarter of fiscal 2009 is in addition to
temporary impairments of $0.7&nbsp;million recorded in fiscal 2008 related to this security. The
Company believes the impairment is temporary as the security is a perpetual preferred security
that possesses certain debt-like characteristics and the Company believes it has the ability to
hold the security until it can recover in value.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In March&nbsp;2009, DSW received preferred shares as distributions-in-kind on two of its auction rate
securities. For the first quarter of fiscal 2009, DSW recorded other-than-temporary impairments
of $0.4&nbsp;million related to these preferred shares. The impairment recorded in the first quarter
of fiscal 2009 is in addition to other-than-temporary impairments of $1.1&nbsp;million recorded in
fiscal 2008 related to these investments.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following table discloses the major categories of the Company&#146;s investments as of May&nbsp;2,
2009 and January&nbsp;31, 2009:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000">Short-term investments, net</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000">Long-term investments, net</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">May 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">January 31,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">May 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">January 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">Available-for-sale:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tax exempt, tax advantaged and taxable bonds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">53,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">65,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Variable rate demand notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tax exempt commercial paper</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Certificates of deposit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Auction rate securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other-than-temporary impairment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,529</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,134</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Unrealized losses included in accumulated
other comprehensive loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(904</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(655</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total
available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">81,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">101,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,266</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FAIR VALUE MEASUREMENTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In September&nbsp;2006, the FASB issued FAS 157, which defines fair value, establishes a framework
for measuring fair value under GAAP and expands disclosures about fair value measurements. The
intent of this standard is to ensure consistency and comparability in fair value measurements
and enhanced disclosures regarding the measurements. This statement is effective for financial
assets and liabilities for fiscal years beginning after November&nbsp;15, 2007, and interim periods
within those fiscal years. For non-financial assets and liabilities measured at fair value on a
nonrecurring basis, FAS 157 is effective for fiscal years beginning after November&nbsp;15, 2008.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Although the adoption of this standard as of February&nbsp;3, 2008 for financial assets and
liabilities and as of February&nbsp;1, 2009 for non-financial assets and liabilities measured on a
nonrecurring basis had no impact on the Company&#146;s financial position or results of operations,
it resulted in additional disclosures regarding fair value measurements. It defines fair value
as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Therefore, fair value
is a market-based measurement based on assumptions of the market participants. As a basis for
these assumptions, FAS 157 establishes the following three level fair value hierarchy:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 1 inputs are unadjusted quoted prices in active markets for identical assets or
liabilities that are publicly accessible. Active markets have frequent transactions with
enough volume to provide ongoing pricing information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 2 inputs are other than level 1 inputs that are directly or indirectly observable.
These can include unadjusted quoted prices for similar assets or liabilities in active
markets, unadjusted quoted prices for identical assets or liabilities in inactive markets,
or other observable inputs.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Level 3 inputs are unobservable inputs.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Financial assets and liabilities measured at fair value on a recurring basis as of May&nbsp;2, 2009
consisted of the following:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Balance at</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short-term investments, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">78,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,596</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">163,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">78,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,596</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Cash and equivalents primarily represent cash deposits and investments in money market funds
held with financial institutions, as well as credit card receivables that settle in less than
three days. The Company&#146;s investments in preferred shares are valued using level 1 inputs of
quoted prices in active markets. The Company&#146;s investment in an auction rate security is
recorded at fair value under FAS 157 using an income approach valuation model that uses level 3
inputs such as the financial condition of the issuers of the underlying securities, expectations
regarding the next successful auction, risks in the auction rate securities market and other
various assumptions. The Company&#146;s other types of investments are valued using a market based
approach using level 2 inputs such as prices of similar assets in active markets.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The activity related to level 3 fair value measurements for the three months ended May&nbsp;2, 2009
is summarized below:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Short-term</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Long-term</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">investments, net</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">investments, net</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carrying value as of January&nbsp;31, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,266</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Transfer out of level 3</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,266</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized losses included in accumulated other comprehensive loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(249</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carrying value as of May&nbsp;2, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When the Company received distributions-in-kind on the underlying preferred shares of its two
auction rate securities, the investments were transferred out of level 3 to level 1 as the
preferred shares are valued using quoted prices in active markets.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Non-financial assets and liabilities measured at fair value on a nonrecurring basis as of May&nbsp;2,
2009 consisted of the following:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Balance at</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-lived assets to be held and used</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Long-lived assets held and used with a carrying amount of $0.8&nbsp;million were written down to
their fair value of $0.4&nbsp;million, resulting in an impairment charge of $0.4&nbsp;million, which was
included in earnings for the three months ended May&nbsp;2, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company periodically evaluates the carrying amount of its long-lived assets, primarily
property and equipment, and finite life intangible assets when events and circumstances warrant
such a review to ascertain if any assets have been impaired. The carrying amount of a long-lived
asset is considered impaired when the carrying value of the asset exceeds the expected future
cash flows from the asset. The Company reviews are conducted at the lowest identifiable level,
which include a store. The impairment loss recognized is the excess of the carrying value of the
asset over its fair value, based on a discounted cash flow analysis using a discount rate
determined by management. Should an impairment loss be realized, it will generally be included
in cost of sales. The impairment charges were recorded within the DSW reportable segment.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>EARNINGS PER SHARE</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Basic earnings per share are based on net income and a simple weighted average of Class&nbsp;A and
Class&nbsp;B common shares and director stock units outstanding. Diluted earnings per share are
calculated using the treasury stock method and reflect the potential dilution of Class&nbsp;A common
shares related to outstanding stock options and restricted stock units. The numerator for the
diluted earnings per share calculation is net income. The denominator is the weighted average
diluted shares outstanding.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 3, 2008</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">(in thousands)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,966</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assumed exercise of dilutive restricted stock units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of shares for computation of diluted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,149</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Options to purchase 3.0&nbsp;million and 1.5&nbsp;million common shares were outstanding at May&nbsp;2, 2009
and May&nbsp;3, 2008, respectively, but were not included in the computation of diluted earnings per
share because the options&#146; exercise prices were greater than the average market price of the
common shares for the period, and therefore, the effect would be anti-dilutive.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>LONG-TERM OBLIGATIONS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B><I>DSW $150 Million Credit Facility </I></B>&#151; The Company has a $150&nbsp;million secured revolving credit
facility with a term of five years that will expire on July&nbsp;5, 2010. Under this facility, the
Company and its subsidiaries are named as co-borrowers. The facility has borrowing base
restrictions and provides for borrowings at variable interest rates based on LIBOR, the prime
rate and the Federal Funds effective rate, plus a margin. The Company&#146;s obligations under this
facility are secured by a lien on substantially all of its and its subsidiary&#146;s personal
property and a pledge of its shares of DSW Shoe Warehouse, Inc. (&#147;DSWSW&#148;). In addition, the
secured revolving credit facility contains usual and customary restrictive covenants relating to
the management and the operation of the business. These covenants, among other things, restrict
the Company&#146;s ability to grant liens on its assets, incur additional indebtedness, open or close
stores, pay cash dividends and redeem its stock, enter into transactions with affiliates and
merge or consolidate with another entity. In addition, if at any time the Company utilizes over
90% of its borrowing capacity under the facility, the Company must comply with a fixed charge
coverage ratio test set forth in the facility documents. At May&nbsp;2, 2009 and January&nbsp;31, 2009,
the Company had no outstanding borrowings and had availability under the facility of $139.9
million and $132.3&nbsp;million, respectively. The Company had outstanding letters of credit of $10.1
million and $17.7&nbsp;million, respectively, at May&nbsp;2, 2009 and January&nbsp;31, 2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>INCOME TAXES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provision for income taxes is based on the current estimate of the annual effective tax rate
and is adjusted as necessary for quarterly events. The Company&#146;s effective tax rate was 40.3%
and 38.5%, respectively, for the three months ended May&nbsp;2, 2009 and May&nbsp;3, 2008.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consistent with its historical financial reporting, the Company has elected to classify interest
expense related to income tax liabilities, when applicable, as part of the interest expense in
its condensed consolidated statements of income rather than income tax expense. The Company will
continue to classify income tax penalties as part of operating expenses in its condensed
consolidated statements of income.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SEGMENT REPORTING</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is managed in three operating segments: DSW stores, dsw.com and leased departments.
DSW stores and dsw.com have been aggregated and are presented as one reportable segment, the DSW
segment, as permitted by FASB Statement No.&nbsp;131 <I>Disclosures about Segments of an Enterprise and
Related Information</I>, based on their similar economic characteristics, products, production
processes, target customers and distribution methods. The Company has identified such segments
based on internal management reporting and management responsibilities and measures segment
profit as gross profit, which is defined as net sales less cost of sales. All operations are
located in the United States. The goodwill balance of
$25.9&nbsp;million outstanding at May&nbsp;2, 2009 and January&nbsp;31, 2009 is recorded in the DSW segment
related to the DSW stores operating segment. The tables below present segment information for
the Company&#146;s two reportable segments:</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<BR>
(unaudited)</B>
</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Leased</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">DSW</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">departments</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Total</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">(in thousands)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Three months ended May&nbsp;2, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">344,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">41,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385,846</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,981</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,409</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of May&nbsp;2, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">695,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">62,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">757,583</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Three months ended May&nbsp;3, 2008:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">321,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">45,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">366,264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,047</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,662</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of January&nbsp;31, 2009:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">659,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">61,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">721,197</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>COMMITMENTS AND CONTINGENCIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is involved in various legal proceedings that are incidental to the conduct of its
business. The Company estimates the range of liability related to pending litigation where the
amount of the range of loss can be estimated. The Company records its best estimate of a loss
when the loss is considered probable. Where a liability is probable and there is a range of
estimated loss, the Company records the most likely estimated liability related to the claim.
In the opinion of management, the amount of any potential liability with respect to current
legal proceedings will not be material to the Company&#146;s results of operations or financial
condition. As additional information becomes available, the Company will assess the potential
liability related to its pending litigation and revise the estimates as needed. Revisions in
its estimates and potential liability could materially impact the Company&#146;s results of
operations and financial condition.</TD>
</TR>

</TABLE>
</DIV>
<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>11.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SUBSEQUENT EVENTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I><B>Filene&#146;s Basement&#151; </B></I>On May 4, 2009, Filene&#146;s Basement filed for
bankruptcy protection. As a result of the filing, DSW has determined that the accounts receivable at May 2, 2009 of $1.0 million from Filene&#146;s
Basement were partially impaired. DSW did not reserve for an amount
for shoe sales or transition services. Included in the results of
operations of DSW for the three months ended May 2, 2009 is bad debt expense of $0.5 million related to the impairment of accounts receivable.
</TD>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I><B>2005 Equity Incentive Plan (&#147;the Plan&#148;)&#151; </B></I>On May 21, 2009, the Company&#146;s shareholders approved an additional 3.0 million
common shares for issuance under the Plan for a total of 7.6 million common shares.
</TD>
</TR>
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>All references to &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; &#147;DSW&#148; or the &#147;Company&#148; in this Quarterly Report on Form&nbsp;10-Q
mean DSW Inc. and its wholly-owned subsidiaries, including DSW Shoe Warehouse, Inc. (&#147;DSWSW&#148;),
except where it is made clear that the term only means DSW Inc. DSW Class&nbsp;A Common Shares are
listed for trading under the ticker symbol &#147;DSW&#148; on the New York Stock Exchange (&#147;NYSE&#148;).</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>All references to &#147;Retail Ventures&#148;, or &#147;RVI&#148;, in this Quarterly Report on </I><I>Form 10-Q</I><I> mean Retail
Ventures, Inc. and its subsidiaries, except where it is made clear that the term only means the
parent company. DSW is a controlled subsidiary of Retail Ventures. RVI Common Shares are listed
under the ticker symbol &#147;RVI&#148; on the NYSE.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>On January&nbsp;23, 2008, Retail Ventures disposed of an 81% ownership interest in its Value City
Department Stores business to VCHI Acquisition Co., a newly formed entity owned by VCDS Acquisition
Holdings, LLC, Emerald Capital Management LLC and Crystal Value, LLC.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>On April&nbsp;21, 2009, Retail Ventures disposed of its Filene&#146;s Basement subsidiary to FB II
Acquisition Corp., a newly formed entity owned by the Buxbaum Group. On May&nbsp;4, 2009, Filene&#146;s
Basement filed a petition for bankruptcy.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Company Overview</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DSW is a leading U.S. branded footwear specialty retailer operating 303 shoe stores in 38 states as
of May&nbsp;2, 2009. We offer a wide selection of better-branded dress, casual and athletic footwear for
women and men, as well as accessories. Our typical customers are brand, quality and style-conscious
shoppers who have a passion for footwear and accessories. Our core focus is to create a distinctive
store experience that satisfies both the rational and emotional shopping needs of our customers by
offering them a vast, exciting selection of in-season styles combined with the convenience and
value they desire. Our stores average approximately 23,000 square feet and carry approximately
26,000 pairs of shoes. We believe this combination of selection, convenience and value
differentiates us from our competitors and appeals to consumers from a broad range of socioeconomic
and demographic backgrounds. In addition, we also operate 365 leased shoe departments for four
other retailers and sell shoes and accessories through dsw.com.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Cautionary Statement Regarding Forward-Looking Information for Purposes of the &#147;Safe Harbor&#148;
Provisions of the Private Securities Litigation Reform Act of 1995</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of the statements in this Quarterly Report on Form 10-Q contain forward-looking statements
which reflect our current views with respect to, among other things, future events and financial
performance. You can identify these forward-looking statements by the use of forward-looking words
such as &#147;outlook,&#148; &#147;believes,&#148; &#147;expects,&#148; &#147;potential,&#148; &#147;continues,&#148; &#147;may,&#148; &#147;should,&#148; &#147;seeks,&#148;
&#147;approximately,&#148; &#147;predicts,&#148; &#147;intends,&#148; &#147;plans,&#148; &#147;estimates,&#148; &#147;anticipates&#148; or the negative version
of those words or other comparable words. Any forward-looking statements contained in this
Quarterly Report on Form 10-Q are based upon our historical performance and on current plans,
estimates and expectations and assumptions relating to our operations, results of operations,
financial condition, growth strategy and liquidity. The inclusion of this forward-looking
information should not be regarded as a representation by us or any other person that the future
plans, estimates or expectations contemplated by us will be achieved. Such forward-looking
statements are subject to numerous risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements. In addition to
those factors described under &#147;Part&nbsp;I, Item&nbsp;1A. Risk Factors,&#148; in our Form 10-K filed on April&nbsp;1,
2009 and &#147;Part&nbsp;II, Item&nbsp;1A. Risk Factors&#148; in this Form 10-Q some important factors that could cause
actual results, performance or achievements for DSW to differ materially from those discussed in
forward-looking statements include, but are not limited to, the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our success in opening and operating new stores on a timely and profitable basis;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continuation of supply agreements and the financial condition of our leased business
partners;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>maintaining good relationships with our vendors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to anticipate and respond to fashion trends;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>fluctuation of our comparable store sales and quarterly financial performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disruption of our distribution operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the realization of our bankruptcy claims related to Filene&#146;s Basement and Value City
Department Stores (&#147;Value City&#148;);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>impact of the disposition of Filene&#146;s Basement by Retail Ventures on the allocation
of expenses pursuant to the shared services agreement with RVI;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to retain our key executives or attract qualified new personnel;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our competitiveness with respect to style, price, brand availability and customer
service;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>declining general economic conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks inherent to international trade with countries that are major manufacturers of
footwear;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the success of dsw.com;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>liquidity and investment risks related to our investments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>RVI&#146;s lease of an office facility;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to secure additional credit upon the termination of our existing credit
facility; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>liquidity risks at Retail Ventures and their impact on DSW.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If one or more of these or other risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results, performance or achievements may vary materially
from what we have projected. Furthermore, new factors emerge from time to time and it is not
possible for management to predict all such factors, nor can it assess the impact of any such
factor on the business or the extent to which any factor, or combination of factors, may cause
results to differ materially from those contained in any forward-looking statement. Any
forward-looking statement speaks only as of the date on which such statement is made, and, except
as required by law, DSW undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made or to reflect the occurrence
of unanticipated events.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Critical Accounting Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our critical accounting policies are described in Item&nbsp;7, <I>Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations</I>, and in the notes to our Consolidated Financial
Statements for the year ended January&nbsp;31, 2009 contained in our Annual Report on Form 10-K as filed
with the Securities and Exchange Commission (&#147;SEC&#148;) on April&nbsp;1, 2009 (the &#147;2008 Annual Report&#148;). We
base these estimates and judgments on our historical experience and other factors we believe to be
relevant, the results of which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. The process of determining
significant estimates is fact-specific and takes into account factors such as historical
experience, current and expected economic conditions, product mix, and in some cases, actuarial and
appraisal techniques. We constantly re-evaluate these significant factors and make adjustments
where facts and circumstances dictate. There have been no significant changes to our critical
accounting policies since the 2008 Annual Report.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Results of Operations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Overview</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the first quarter of fiscal 2009, DSW continued to feel the impact of a difficult economic
environment. Comparable store sales for the first quarter of fiscal 2009 decreased 4.7% compared to
a decrease of 5.4% in the same period last year. Negative comparable store sales were primarily
driven by a decrease in units per transaction, while traffic and conversion were relatively flat.
Despite a decrease in our comparable store sales, total sales in the first quarter of fiscal 2009
increased 5.3% due to new DSW stores and dsw.com sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Even in these difficult economic times, we have continued to make investments in our business that
are critical to our long-term growth, such as improved information technology infrastructure and
new stores. Despite our current decline in earnings and our commitment to invest in the future
growth of DSW, our balance sheet remains strong. As of May&nbsp;2, 2009, our cash and short-term
investments balance increased to $163.5&nbsp;million and we have no long-term debt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of May&nbsp;2, 2009, we operated 303 DSW stores in 38 states, dsw.com and leased shoe departments in
274 Stein Mart stores, 65 Gordmans stores, 25 Filene&#146;s Basement stores and one Frugal Fannie&#146;s
store. We have two reportable segments, the DSW segment, which includes DSW stores and dsw.com, and
the leased department segment.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth, for the periods indicated, the percentage relationships to net
sales of the listed items included in our condensed consolidated statements of income:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 3, 2008</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(72.8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(73.5</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(24.1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(22.1</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other-than-temporary impairment charge on
investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax provision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.8</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.9</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Key Financial Measures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In evaluating our results of operations, we refer to a number of key financial and non-financial
measures relating to the performance of our business. Among our key financial measures are net
sales, operating profit and net income. Other measures that we use in evaluating our performance
include number of DSW stores and leased departments, net sales per average gross square foot for
DSW stores, and change in comparable stores sales. The following describes certain line items set
forth in our consolidated statement of income:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Net Sales. </I>We record net sales exclusive of sales tax and net of returns. For comparison purposes,
we define stores and leased departments as comparable or non-comparable. A store&#146;s or leased
department&#146;s sales are included in comparable sales if the store or leased department has been in
operation at least 14&nbsp;months at the beginning of the fiscal year. Stores and leased departments are
excluded from the comparison in the quarter that they close. Stores that are remodeled or relocated
are excluded from the comparison if there is a material change in the size of the store or the
store is relocated more than one mile out of its area.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Cost of Sales. </I>Our cost of sales includes the cost of merchandise, distribution and warehousing
(including depreciation), store occupancy (excluding depreciation), permanent and point of sale
reductions, markdowns and shrinkage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Operating Expenses. </I>Operating expenses include expenses related to store management and store
payroll costs, advertising, leased department operations, store depreciation and amortization,
pre-opening advertising and other pre-opening costs (which are expensed as incurred) and corporate
expenses. Corporate expenses include expenses related to buying, information technology,
depreciation expense for corporate cost centers, marketing, legal, finance, outside professional
services, customer service center expenses, allocable costs to and from Retail Ventures, payroll
and benefits for associates and payroll taxes. Corporate level expenses are primarily attributable
to operations at our corporate offices in Columbus, Ohio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>THREE MONTHS ENDED MAY 2, 2009 COMPARED TO THREE MONTHS ENDED MAY 3, 2008</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Net Sales. </I>Sales for the three months ended May&nbsp;2, 2009 increased by 5.3% from the three months
ended May&nbsp;3, 2008. The following table summarizes the increase in our net sales:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">May 2, 2009</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3">(in millions)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales for the three months ended May&nbsp;3, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">366.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Decrease in comparable store sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(16.5</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase from 2008 and 2009 new stores, dsw.com and closed store sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net sales for the three months ended May&nbsp;2, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385.8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes our sales breakdown by reportable segment:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000">Three months ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">May 3, 2008</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">(in millions)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DSW</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">344.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">321.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Leased departments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total DSW Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">366.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The decrease in comparable store sales of 4.7% was primarily a result of the continued challenging
economic environment in both segments evidenced by a decrease in units per transaction. DSW
comparable store sales decreased in women&#146;s by 4.7%, men&#146;s by 10.2% and the athletic category by
4.0%. For accessories, DSW comparable store sales increased by 11.6% due to the performance of
handbags.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Gross Profit. </I>Gross profit increased 8.2% from the first quarter of fiscal 2008. Gross profit
increased as a percentage of net sales from 26.5% in the first quarter of fiscal 2008 to 27.2% in
the first quarter of fiscal 2009. By reportable segment and in total, gross profit as a percentage
of net sales was:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 2, 2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">May 3, 2008</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DSW</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">28.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">27.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Leased departments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">19.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total DSW Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">27.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">26.5</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The merchandise margin, gross profit excluding distribution and store occupancy, for the DSW
segment for the first quarter of fiscal 2009 increased as a percentage of net sales to 43.7%
compared to merchandise margin of 42.7% for the first quarter of fiscal 2008. The increase in
merchandise margin was primarily a result of a decrease in markdowns. The increase in merchandise margin was partially offset by increased store occupancy
and distribution expenses as a percentage of net sales. The increase in distribution expense as a
percentage of net sales to 1.7% from 1.4% was primarily a result of expenses related to our dsw.com
fulfillment center. Store occupancy expense for the DSW segment as a percentage of net sales
increased to 13.9% for the first quarter of fiscal 2009 from 13.5% for the first quarter of fiscal
2008 as a result of decreased average store sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The gross profit for leased departments increased as a percentage of net sales compared to the
first quarter of fiscal 2008 due to decreased markdowns. The decrease in markdowns was a result of
enhancements to the clearance markdown process and a result of aligning inventory to sales demand.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Operating Expenses. </I>For the first quarter of fiscal 2009, operating expenses increased as a
percentage of net sales to 24.1% from 22.1% in the first quarter of fiscal 2008. The increase in
operating expenses as a percentage of net sales was driven by an increase in marketing and
depreciation expenses. Marketing expenses as a percentage of net sales increased by 140 basis
points due to increases in media and broadcast production spending. Depreciation expense increased
due to significant capital investments in our store growth, dsw.com and infrastructure initiatives.
As a percentage of net sales, pre-opening and store expenses were slightly favorable to last year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Operating Profit. </I>Operating profit decreased as a percentage of net sales to 3.1% in the first
quarter of fiscal 2009 from 4.4% in the first quarter of fiscal 2008. This decrease was primarily
the result of increases in operating expenses partially offset by an increase in gross profit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Interest Income, Net. </I>Interest income, net of interest expense, for the first quarter of fiscal
2009 was $0.3&nbsp;million as compared to $0.7&nbsp;million of net interest income for the first quarter of
fiscal 2008. Interest income decreased as a result of lower interest rates in first quarter of
fiscal 2009 as compared to the first quarter of fiscal 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Other-than-temporary impairment charge on investments. </I>Other-than-temporary charges on investments
for the first quarter of fiscal 2009 were $0.4&nbsp;million, which represents the impairments related to
our investments in preferred shares. There were no other-than-temporary impairment charges for the
first quarter of fiscal 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Income Taxes. </I>Our effective tax rate for the first quarter of fiscal 2009 was 40.3%, compared to
38.5% for the first quarter of fiscal 2008. The increase in the effective tax rate is a result of
non-deductible executive compensation, valuation allowances related to our impairment charges on
investments and a tax deficiency related to the write-off of stock
based compensation related deferred tax assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Net Income. </I>For the first quarter of fiscal 2009, net income decreased $3.1&nbsp;million, or 30.6%,
compared to the first quarter of fiscal 2008 and represented 1.9% and 2.8% of net sales,
respectively. This decrease was primarily the result of an increase in operating expenses partially
offset by an increase in gross profit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Seasonality</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business is subject to seasonal trends. The sales in our DSW stores have typically been higher
in the first and third quarters, when our customers&#146; interest in new seasonal styles increases.
Unlike many other retailers, we have not historically experienced a large increase in net sales
during our fourth quarter associated with the winter holiday season.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity and Capital Resources</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our primary ongoing cash flow requirements are for seasonal and new store inventory purchases,
capital expenditures in connection with our store expansion, improving our information systems,
dsw.com, the remodeling of existing stores and infrastructure growth. Our working capital and
inventory levels typically build seasonally. We believe that we have sufficient financial resources
and access to financial resources at this time. We are committed to a cash management strategy that
maintains liquidity to adequately support the operation of the business, our growth strategy and to
withstand unanticipated business volatility. We believe that cash generated from DSW operations,
together with our current levels of cash and equivalents and short-term investments as well as
availability under our revolving credit facility, will be sufficient to maintain our ongoing
operations, support seasonal working capital requirements and fund capital expenditures related to
projected business growth.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although our plan of continued expansion could place increased demands on our financial,
managerial, operational and administrative resources, we do not believe that our anticipated growth
plan will have an unfavorable impact on our operations or liquidity. The current slowdown in the
United States economy has adversely affected consumer confidence and consumer spending habits,
which may result in further reductions in comparable store sales in our existing stores with the
resultant increase in inventory levels and markdowns. Reduced sales may result in reduced operating
cash flows if we are not able to appropriately manage inventory levels or leverage expenses. These
negative economic conditions may also affect future profitability and may cause us to reduce the
number of future store openings, impair goodwill or impair long-lived assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Net Working Capital. </I>Net working capital increased $14.6&nbsp;million to $310.3&nbsp;million as of May&nbsp;2,
2009 from $295.7&nbsp;million at January&nbsp;31, 2009, primarily due to the increase in inventory partially
offset by the corresponding increase in accounts payable. At May&nbsp;2, 2009 and January&nbsp;31, 2009, the
current ratio was 2.7 and 2.9, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Operating Cash Flows. </I>For the three months ended May&nbsp;2, 2009, our net cash provided by operations
was $14.8&nbsp;million, compared to $10.2&nbsp;million for the three months ended May&nbsp;3, 2008. The increase
in our net cash flow from operations for the three months ended May&nbsp;2, 2009 was primarily a result
of a lower decrease in working capital as compared to the three months ended May&nbsp;3, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Investing Cash Flows</I>. For the three months ended May&nbsp;2, 2009, our net cash provided by investing
activities was $12.6&nbsp;million compared to $46.3&nbsp;million for the three months ended May&nbsp;3, 2008. The
decrease in net cash provided by investing activities is a result of decreased sales and maturities
of available-for-sale securities and decreased capital expenditures as a result of fewer store
openings. During the three months ended May&nbsp;2, 2009, we incurred $8.4&nbsp;million in capital
expenditures. Of this amount, we incurred $4.0&nbsp;million related to stores, $2.1&nbsp;million related to
supply chain projects and warehouses and $2.3&nbsp;million related to information technology equipment
upgrades and new systems.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We expect to spend approximately $35&nbsp;million for capital expenditures in fiscal 2009. Our future
capital expenditures will depend heavily on the number of new stores we open, the number of
existing stores we remodel, our information technology and infrastructure investments and the
timing of these expenditures. We currently plan to open approximately 10 stores in fiscal 2009.
During fiscal 2008, the average investment required to open a typical new DSW store was
approximately $1.6&nbsp;million, prior to construction and tenant allowances. Of this amount, gross
inventory typically accounted for $0.5&nbsp;million, fixtures and leasehold improvements typically
accounted for $1.0&nbsp;million and pre-opening advertising and other pre-opening expenses typically
accounted for $0.1&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>$150 Million Secured Revolving Credit Facility. </I>We have a $150&nbsp;million secured revolving credit
facility that expires July&nbsp;5, 2010. Under this facility, we and our subsidiaries are named as
co-borrowers. Our facility has borrowing base restrictions and provides for borrowings at variable
interest rates based on LIBOR, the prime rate and the Federal Funds effective rate, plus a margin.
Our obligations under this credit facility are secured by a lien on substantially all of our and
our subsidiary&#146;s personal property and a pledge of our shares of DSW Shoe Warehouse. In addition,
our secured revolving credit facility contains usual and customary restrictive covenants relating
to our management and the operation of our business. These covenants, among other things, restrict
our ability to grant liens on our assets, incur additional indebtedness, open or close stores, pay
cash dividends and redeem our stock, enter into transactions with affiliates and merge or
consolidate with another entity. In addition, if at any time we utilize over 90% of our borrowing
capacity under this facility, we must comply with a fixed charge coverage ratio test set forth in
the facility documents. At May&nbsp;2, 2009 and January&nbsp;31, 2009, $139.9&nbsp;million and $132.3&nbsp;million,
respectively, were available under the $150&nbsp;million secured revolving credit facility and no direct
borrowings were outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are currently seeking a new secured revolving credit facility as our current credit facility
will expire in July&nbsp;2010. Based upon the current credit markets, the terms of the new credit
facility may not be as favorable as our current terms.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Contractual Obligations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DSW had outstanding letters of credit that totaled $10.1&nbsp;million as of May&nbsp;2, 2009 and $17.7
million as of January&nbsp;31, 2009. If certain conditions are met under these arrangements, the Company
would be required to satisfy the obligations in cash. Due to the nature of these arrangements and
based on historical experience and other factors, DSW does not expect to make any significant
payments outside of terms set forth in these arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of May&nbsp;2, 2009, we have entered into various construction commitments, including capital items
to be purchased for projects that were under construction, or for which a lease has been signed.
Our obligations under these commitments aggregated to $0.2&nbsp;million as of May&nbsp;2, 2009. In addition,
we have signed lease agreements for seven new store locations expected to be opened over the next
18&nbsp;months, with annual rent of approximately $2.0&nbsp;million. In connection with the new lease
agreements, we will receive $2.7&nbsp;million of construction and tenant allowance reimbursements for
expenditures at these locations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We operate all our stores, warehouses and corporate office space from leased facilities. Lease
obligations are accounted for either as operating leases or as capital leases based on lease by
lease review at lease inception. The Company had no capital leases outstanding as of May&nbsp;2, 2009 or
January&nbsp;31, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Off-Balance Sheet Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of May&nbsp;2, 2009, the Company has not entered into any &#147;off-balance sheet&#148; arrangements, as that
term is described by the SEC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Proposed Accounting Standards</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Financial Accounting Standards Board (&#147;FASB&#148;) periodically issues Statements of Financial
Accounting Standards, some of which require implementation by a date falling within or after the
close of the fiscal year. See Note 1 to the Condensed Consolidated Financial Statements for a
discussion of the new accounting standards implemented.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2008, the SEC released a proposed roadmap regarding the potential mandatory adoption of
International Financial Reporting Standards (&#147;IFRS&#148;). Under the proposed roadmap, as an accelerated
filer, we may be required to prepare financial statements in accordance with IFRS as early as 2015.
In 2011, the SEC will decide on the mandatory adoption of IFRS. We are currently assessing the
implications should we be required to adopt IFRS in the future.
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our cash and equivalents have maturities of 90&nbsp;days or less. We also have investments in tax
exempt, tax advantaged and taxable bonds, variable rate demand notes, tax exempt commercial paper,
certificates of deposit, an auction rate security and preferred shares. We have $12.0&nbsp;million
invested in certificates of deposit and participate in the Certificate of Deposit Account Registry
Service<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> (&#147;CDARS&#148;). CDARS provides FDIC insurance on deposits of up to $50.0&nbsp;million.
Certificates of deposit mature every 28 to 91&nbsp;days. Our other types of short-term investments
generally have interest reset dates of every 7&nbsp;days. These financial instruments may be subject to
interest rate risk through lost income should interest rates increase during their limited term to
maturity or resetting of interest rates and thus may limit our ability to invest in higher interest
investments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of May&nbsp;2, 2009, there was no long-term debt outstanding. Future borrowings, if any, would bear
interest at negotiated rates and would be subject to interest rate risk. Because we have no
outstanding debt, we do not believe that a hypothetical adverse change of 1% in interest rates
would have a material effect on our financial position.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Controls and Procedures.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Evaluation of Disclosure Controls and Procedures</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We, under the supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls
and procedures, as such term is defined in Securities Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e).
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded, as of
the end of the period covered by this report, that such disclosure controls and procedures were
effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Changes in Internal Control over Financial Reporting</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No change was made in our internal control over financial reporting during our most recent fiscal
quarter that has materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART II. OTHER INFORMATION</B>
</DIV>

<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;1. Legal Proceedings.</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are involved in various legal proceedings that are incidental to the conduct of our business.
We estimate the range of liability related to pending litigation where the amount of the range of
loss can be estimated. We record our best estimate of a loss when the loss is considered probable.
Where a liability is probable and there is a range of estimated loss, we record the most likely
estimated liability related to the claim. In the opinion of management, the amount of any
potential liability with respect to current legal proceedings will not be material to our results
of operations or financial condition. As additional information becomes available, we will assess
the potential liability related to our pending litigation and revise the estimates as needed.
Revisions in our estimates and potential liability could materially impact our results of
operations and financial condition.
</DIV>
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1A. Risk Factors.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following Risk factors supplement DSW&#146;s risk factors set forth in Part&nbsp;I, Item&nbsp;1A of our last
Annual Report on Form 10-K for the fiscal year ended January&nbsp;31, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Filene&#146;s Basement has filed for bankruptcy protection. Filene&#146;s Basement owes us approximately
$1.0&nbsp;million as of May&nbsp;2, 2009 and we may not be able to collect this amount. Further, we have
signed an agreement to provide transition services for 90&nbsp;days, after which time we may not be
able to allocate Filene&#146;s Basement a portion of our expenses, which will lead to increased expense
to us.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;4, 2009, Filene&#146;s Basement filed for bankruptcy protection. We have negotiated an agreement
with Filene&#146;s Basement to continue to provide services for 90&nbsp;days for a fixed amount, including
risk management, financial services, benefits administration, payroll and information technology
services, in exchange for a monthly payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of May&nbsp;2, 2009, Filene&#146;s Basement owes us approximately $1.0&nbsp;million for shoe sales and
services rendered by us prior to the filing of bankruptcy. We have reserved $0.5&nbsp;million of the
$1.0&nbsp;million, but have not reserved an amount for shoe sales or transition services. We plan on
submitting a proof of claim in the bankruptcy proceeding seeking payment in full for all amounts
owed to us. However, there is no assurance that we will be able to collect all or any of the
amounts owed to us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Further, after the end of the 90&nbsp;day transition services period, we will no longer be able to
allocate a portion of our expenses to Filene&#146;s Basement, which will lead to increased expenses for
us. The amount of this increased expense could be material and may have a negative impact on our
results of operations and financial position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Through the Amended and Restated Shared Services Agreement with RVI, we provided the cash related
to capital expense for certain information technology assets for Filene&#146;s Basement. We expected to
recoup our expenditures by charging depreciation to Filene&#146;s Basement based on the expected lives
of the assets. We are exposed to the risk that Filene&#146;s Basement may not be able to reimburse us
for these expenditures which could adversely affect our financial performance. If Filene&#146;s
Basement was to liquidate or its purchaser does not buy these assets, we are exposed to an
impairment risk related to these assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have entered into Supply Agreements with Filene&#146;s Basement. If Filene&#146;s Basement were to
terminate or fail to renew our supply agreements, reject our supply agreements in bankruptcy,
close a significant number of stores or liquidate, it could have a material adverse effect on our
business and financial performance.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our supply agreements are typically for multiple years with automatic renewal options as long as
either party does not give notice of intent not to renew. For Filene&#146;s Basement, our contractual
termination date is January&nbsp;2010. In addition, the agreements contain provisions that may trigger
an earlier termination. In the event of the loss of Filene&#146;s Basement leased departments, it is
unlikely that we would be able to proportionately reduce expenses to
the reduction of sales. In addition, if Filene&#146;s Basement were
to close a significant number of stores or liquidate, we could incur
additional markdowns resulting in decreased gross profit for DSW. If
Filene&#146;s Basement were to terminate or fail to renew our supply agreements, reject our supply
agreements in bankruptcy, close a significant number of stores or liquidate, it could have a
material adverse effect on our business and financial performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>RVI has a long-term lease and DSW has agreed to pay two-thirds of the expense related to the
lease.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">RVI is a party to a lease for an office facility in Columbus, Ohio (the &#147;Premises&#148;) as of
September&nbsp;2003. In April&nbsp;2005, RVI sublet the Premises to a third-party at a rent that was lower
than the rent charged to RVI under the lease. However, RVI remains liable under the lease. DSW,
through the master separation agreement entered into with RVI at the time of DSW&#146;s IPO, agreed to
pay two-thirds of any net expense and receive two-thirds of any net profit from the lease. In
fiscal 2009, DSW expects to pay $0.5&nbsp;million related to this agreement. In the event the
third-party subtenant defaults under the sublease or vacates the premises, the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">amount of this increased expense could be material and may have a negative impact on our results
of operations and financial position.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(a)&nbsp;Recent sales of unregistered securities. Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;Use of Proceeds. Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(c)&nbsp;Purchases of equity securities by the issuer and affiliated purchasers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DSW made no purchases of its Common Shares during the three months ended May&nbsp;2, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We do not anticipate paying cash dividends on our Common Shares in the foreseeable future.
Presently, we expect that all of our future earnings will be retained for development of our
business. The payment of any future dividends will be at the discretion of our board of directors
and will depend upon, among other things, future earnings, operations, capital requirements, our
general financial condition and general business conditions. Our credit facility restricts the
payment of dividends by us or our subsidiaries, other than dividends paid in our stock or paid to
another affiliate, and cash dividends can only be paid to Retail Ventures by us up to the aggregate
amount of $5.0&nbsp;million, less the amount of any loan advances made to Retail Ventures by us or our
subsidiaries.
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Defaults Upon Senior Securities. </B>None.
</DIV>
<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;4. Submission of Matters to a Vote of Security Holders. </B>None.

</DIV>
<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;5. Other Information. </B>None.

</DIV>
<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;6. Exhibits. </B>See Index to Exhibits on page 24.

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><U><B>DSW INC.</B></U><BR>
(Registrant)<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: June 4, 2009&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Douglas J. Probst
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Douglas J. Probst&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Executive Vice President and Chief
Financial Officer
(principal financial officer and duly
authorized officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>
<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEX TO EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DSW Inc. 2005 Equity Incentive Plan.
#</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Restricted Stock Units Award Agreement for Employees. #</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Stock Units for automatic
grants to non-employee directors and for conversion of non-employee
directors&#146; cash retainer.&nbsp;&nbsp;# </TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Nonqualified Stock Option Award Agreement for Employees. #</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rule&nbsp;13a-14(a)/15d-14(a)
Certification of Chief Executive Officer</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rule&nbsp;13a-14(a)/15d-14(a)
Certification of Chief Financial Officer</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Section&nbsp;1350 Certification of
Chief Executive Officer</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Section&nbsp;1350 Certification of
Chief Financial Officer</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">#
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Management contract or compensatory plan or arrangement.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>2
<FILENAME>l36650aexv10w23.htm
<DESCRIPTION>EX-10.23
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.23</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><b>Exhibit&nbsp;10.23</b>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>2005 EQUITY INCENTIVE PLAN</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>1.00 PURPOSE AND EFFECTIVE DATE</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>1.01 Purpose. </B>This Plan is intended to foster and promote the long-term financial success of the
Company and Related Entities and to materially increase shareholder value by <B>&#091;1&#093; </B>providing
Consultants, Employees and Eligible Directors an opportunity to acquire an ownership interest in
the Company and <B>&#091;2&#093; </B>enabling the Company and Related Entities to attract and retain the services of
outstanding Consultants, Employees and Eligible Directors upon whose judgment, interest and special
efforts the successful conduct of the Group&#146;s business is largely dependent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>1.02 Effective Date. </B>The Plan will be effective upon its adoption by the Board and approval by the
affirmative vote of the Company&#146;s shareholders under applicable rules and procedures described in
Code &#167;&#167;162(m) and 422. Any Award granted before shareholder approval will be null and void if the
shareholders do not approve the Plan within the period just described. Subject to Section&nbsp;14.00,
the Plan will continue until the tenth anniversary of the date it is adopted by the Board or
approved by the Company&#146;s shareholders, whichever is earliest.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>2.00 DEFINITIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When used in this Plan, the following terms have the meanings given to them in this section unless
another meaning is expressly provided elsewhere in this document or clearly required by the
context. When applying these definitions and any other word, term or phrase used in this Plan, the
form of any word, term or phrase will include any and all of its other forms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Act. </B>The Securities Exchange Act of 1934, as amended, or any successor statute of similar effect
even if the Company is not subject to the Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Affiliated SAR. </B>An SAR that is granted in conjunction with an Option and which is always deemed to
have been exercised at the same time that the related Option is exercised. The deemed exercise of
an Affiliated SAR will not reduce the number of shares of Stock subject to the related Option,
except to the extent of the exercise of the related Option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Annual Meeting. </B>The annual meeting of the Company&#146;s shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Annual Retainer. </B>The annual retainer and any other fees paid to each Eligible Director for service
as a member of the Board and as a member of any Board committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Annual Retainer Deferral Form. </B>The form each Eligible Director must complete to defer all or a
portion of his or her Annual Retainer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Award. </B>Any Incentive Stock Option, Nonstatutory Stock Option, Performance Share, Performance Unit,
Restricted Stock, Restricted Stock Unit, Stock Appreciation Right and Stock Unit granted under the
Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Award Agreement. </B>The written or electronic agreement between the Company and each Participant that
describes the terms and conditions of each Award and the manner in which it will be settled if
earned. If there is a conflict between the terms of this Plan and the terms of the Award
Agreement, the terms of this Plan will govern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Beneficiary. </B>The person a Participant designates to receive (or to exercise) any Plan benefits (or
rights) that are unpaid (or unexercised) when he or she dies. A Beneficiary may be designated only
by following the procedures described in Section&nbsp;15.02; neither the Company nor the Committee is
required to infer a Beneficiary from any other source.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Board. </B>The Company&#146;s board of directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cause. </B>Unless the Committee specifies otherwise in the Award Agreement, with respect to any
Participant and subject to any cure provision included in any written agreement between the
Participant and the Company:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>A material failure to substantially perform his or her position or duties;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Engaging in illegal or grossly negligent conduct that is materially injurious to the
Company or any Related Entity;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>A material violation of any law or regulation governing the Company or any Related
Entity;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>Commission of a material act of fraud or dishonesty which has had or is likely to have a
material adverse effect upon the Company&#146;s (or any Related Entity&#146;s) operations or financial
conditions;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;5&#093; </B>A material breach of the terms of any other agreement (including any employment
agreement) with the Company or any Related Entity; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;6&#093; </B>A breach of any term of this Plan or Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If a Participant Terminates (or is Terminated) for any reason other than Cause and the Company
subsequently discovers an act, failure or event that, if known before the Participant&#146;s Termination
would have justified a Termination for Cause and that act, event or failure was actively concealed
by the Participant and could not have been discovered through reasonable diligence before the
Participant Terminated, that Participant will be retroactively treated as having been Terminated
for Cause.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Change in Control. </B>The earliest of any of the following events to occur after completion of the
initial public offering of the Company&#146;s stock which is the subject of the Registration Statement:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>During any period consisting of 12 consecutive calendar months beginning after completion
of the initial public offering of the Company&#146;s stock which is the subject of the
Registration Statement, the members of the Board specified in the Registration Statement
(&#147;Incumbent Directors&#148;) cease for any reason other than death to constitute at least a
majority of the members of the Board, provided <B>&#091;a&#093; </B>that any director whose election, or
nomination for election by the Company&#146;s shareholders, was approved by a vote of at least a
majority of the then Incumbent Directors also will be treated as an Incumbent Director unless
that person was nominated for election to the Board (or otherwise became a member of the
Board) in connection with an actual or threatened election contest relating to the election
or removal of Board members or other threatened or actual solicitation of proxies of consent
by or in behalf of any &#147;person,&#148; including a &#147;group&#148; &#091;as those terms are used in Act &#167;&#167;13(d)
and 14(d)(2)&#093;, <B>&#091;b&#093; </B>this element of this definition will not apply if the Company reorganizes
into an entity that does not have a board of directors or analogous governing body and that
reorganization is not a Change in Control under another element of this definition and <B>&#091;c&#093; </B>if
the Company becomes a subsidiary of another entity (i.e., another entity owns, directly or
indirectly, more than 50&nbsp;percent of the total combined voting power of all classes of Stock)
in a transaction that is not a Change in Control under another element of this definition,
subpart &#091;1&#093; of this definition will be applied by reference to changes to the board of
directors of the parent entity (or of the ultimate parent entity).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Any &#147;person,&#148; including a &#147;group&#148; &#091;as these terms are used in Act &#167;&#167;13(d) and 14(d)(2)&#093;,
becomes the &#147;beneficial owner&#148; (as defined in Rule&nbsp;13d-3 under the Act), directly or
indirectly, of 30&nbsp;percent or more of the combined voting power of the Company and of
securities of the Company sufficient to elect a majority of the members of the Board but
disregarding the effect of <B>&#091;a&#093; </B>any acquisition by a person who on the Effective Date is the
beneficial owner of 30&nbsp;percent or more of the combined voting power of the Company, <B>&#091;b&#093; </B>any
acquisition directly from the Company, including a public offering of securities, <B>&#091;c&#093; </B>any
acquisition by the Company or any Related Entity, <B>&#091;d&#093; </B>any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Related Entity, <B>&#091;e&#093; </B>any
acquisition through a transaction described in subpart &#091;3&#093;, &#091;4&#093; or &#091;5&#093; of this definition,
<B>&#091;f&#093; </B>any acquisition by Retail Ventures, Inc. or any corporation, partnership or other form of
unincorporated entity of which Retail Ventures, Inc. owns, directly or indirectly, 50&nbsp;percent
or more of the total combined voting power of all classes of stock, if the entity is a
corporation, or of the capital or profits interest, if the entity is a partnership or another
form of unincorporated entity, <B>&#091;g&#093; </B>any acquisition by Schottenstein Stores Corporation (the
persons identified in subparts &#091;a&#093;, &#091;c&#093;, &#091;f&#093; and &#091;g&#093; of this subpart being sometimes referred
to as &#147;Permitted Acquirers&#148;), <B>&#091;h&#093; </B>any acquisition by any one or more of the trusts
established for the benefit of any of Jay L. Schottenstein, Susan S. Diamond, Ann Deshe, Lori
Schottenstein, Geraldine Schottenstein or any of their respective spouses, children or lineal
descendants or any person controlled by any such trust or trusts, <B>&#091;i&#093; </B>any acquisition by an
entity that files SEC Form 13-G in connection with its ownership of Stock unless and until
that entity files SEC Form 13-D in connection with its ownership of Stock or <B>&#091;j&#093; </B>any
acquisition by Cerberus Partners, Ltd. unless, at the time of the acquisition, the Permitted
Acquirers, as defined in subpart &#091;2&#093;&#091;g&#093; of this definition and the trusts described in
subpart &#091;2&#093;&#091;h&#093; of this definition, directly or indirectly, own less than 10&nbsp;percent of the
voting power of the Company&#146;s stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>The completion of a transaction or a series of related transactions effecting <B>&#091;a&#093; </B>the
merger or other business combination of the Company with or into another entity other than a
Permitted Acquirer in which the shareholders of the Company immediately before the effective
date of such merger or other business combination own less than 50&nbsp;percent of the voting
power in such entity; or <B>&#091;b&#093; </B>the sale or other disposition of all or substantially all of the
assets of the Company except a sale or other disposition to <B>&#091;i&#093; </B>an entity in which the
shareholders of the Company immediately before
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the sale or disposition own more than 50&nbsp;percent of the voting power of such entity after
that transaction or <B>&#091;ii&#093; </B>a Permitted Acquirer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>Liquidation or dissolution of the Company other than a liquidation or dissolution into an
entity <B>&#091;a&#093; </B>in which the shareholders of the Company before the effective date of the
liquidation or dissolution own more than 50&nbsp;percent of the voting power of such entity after
the liquidation or dissolution or <B>&#091;b&#093; </B>which is a Permitted Acquirer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;5&#093; </B>Any other transaction or event that the Board, in its sole discretion, decides will have
as material an effect on the Company as any transaction or event described in subparts &#091;1&#093;
through &#091;4&#093; of this definition but which is not otherwise described in this section.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Provided, in the case of an award (or portion thereof) subject to Code &#167;409A, such event also
constitutes a change in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the Company&#146;s assets, within the meaning of Code &#167;409A. However, and
regardless of any other provision of this Plan or element of this definition, a Change in Control
will not occur solely as a result of the initial public offering of the Company&#146;s stock which is
the subject of the Registration Statement or of any event directly related to that initial public
offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Change in Control Price. </B>The highest price per share of Stock offered in conjunction with any
transaction resulting in a Change in Control (as determined in good faith by the Committee if any
part of the offered price is payable other than in cash) or, in the case of a Change in Control
occurring solely by reason of events not related to a transfer of Stock, the highest Fair Market
Value of a share of Stock on any of the 30 consecutive trading days ending on the last trading day
before the Change in Control occurs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Code. </B>The Internal Revenue Code of 1986, as amended or superseded after the Effective Date and any
applicable rulings or regulations issued under the Code.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Committee.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>In the case of any Award to Eligible Directors, the entire Board;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>In the case of any Award granted to Participants other than Eligible Directors before the
Company becomes a &#147;publicly held corporation,&#148; as defined in Code &#167;162(m)(2), the entire
Board; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>In the case of Awards made to Participants other than Eligible Directors after the
Company becomes a &#147;publicly held corporation,&#148; as defined in Code &#167;162(m)(2), the Board&#146;s
Compensation Committee which also constitutes a &#147;compensation committee&#148; within the meaning
of Treas. Reg. &#167;1.162-27(c)(4). The Committee will be comprised of at least three persons
<B>&#091;a&#093; </B>each of whom is <B>&#091;i&#093; </B>an outside director, as defined in Treas. Reg. &#167;1.162-27(e)(3)(i) and
<B>&#091;ii&#093; </B>a &#147;non-employee&#148; director within the meaning of Rule&nbsp;16b-3 under the Act and <B>&#091;b&#093; </B>none of
whom may receive remuneration from the Company or any Related Entity in any capacity other
than as a director, except as permitted under Treas. Reg. &#167;1.162-27(e)(3)(ii).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Company. </B>DSW Inc., an Ohio corporation, and any and all successors to it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Consultant. </B>Any person, other than an Employee or an Eligible Director, who provides significant
services to the Company or any Related Entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Covered Officer. </B>Those Employees whose compensation is subject to limited deductibility under
Code &#167;162(m) as of the last day of any calendar year ending with or within any Performance Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Disability. </B>Unless the Committee specifies otherwise in the Award Agreement:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>With respect to an Incentive Stock Option, as defined in Code &#167;22(e)(3).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>With respect to any Award subject to Code &#167;409A, the Participant is <B>&#091;a&#093; </B>unable to engage
in any substantial gainful activity by reason of any medically determinable physical or
mental impairment arising before Termination which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 continuous months beginning
before Termination; or <B>&#091;b&#093; </B>by reason of any readily determinable physical or mental
impairment arising before Termination which can be expected to result in death or can be
expected to last for a continuous period of not less than 12&nbsp;months beginning before
Termination, receiving income replacement benefits for a period of not less than three months
beginning before Termination under an accident and health plan covering employees of the
Participant&#146;s employer; or
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>With respect to any Award not described in subpart &#091;1&#093; or &#091;2&#093; of this definition, the
Participant&#146;s inability, with a reasonable accommodation, to perform his or her duties on a
full-time basis for a period of more than six consecutive calendar months due to a physical
or mental infirmity arising before Termination.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Dividend Equivalent Right. </B>A right to receive the amount of any dividend paid on a share of Stock
underlying a Stock Unit, as provided in Section&nbsp;7.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Eligible Director. </B>A person who, on an applicable Grant Date <B>&#091;1&#093; </B>is an elected member of the Board
or of a Related Board (or has been appointed to the Board or to a Related Board to fill an
unexpired term and will continue to serve at the expiration of that term only if elected by
shareholders) and <B>&#091;2&#093; </B>is not an Employee. For purposes of applying this definition, an Eligible
Director&#146;s status will be determined as of the Grant Date applicable to each affected Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Employee. </B>Any person who, on any applicable date, is a common law employee of the Company or any
Related Entity. A worker who is classified as other than a common law employee but who is
subsequently reclassified as a common law employee of the Company for any reason and on any basis
will be treated as a common law employee only from the date that reclassification occurs and will
not retroactively be reclassified as an Employee for any purpose of this Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Exercise Price. </B>The price at which a Participant may exercise an Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Fair Market Value. </B>The value of one share of Stock on any relevant date, determined under the
following rules:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>If the Stock is traded on an exchange, the reported &#147;closing price&#148; on the relevant date,
if it is a trading day, otherwise on the next trading day;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>If the Stock is traded over-the-counter with no reported closing price, the mean between
the lowest bid and the highest asked prices on that quotation system on the relevant date if
it is a trading day, otherwise on the next trading day; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>If neither subparts &#091;1&#093; nor &#091;2&#093; of this definition apply, the fair market value as
determined by the Committee in good faith and, with respect to Incentive Stock Options,
consistent with rules prescribed under Code &#167;422.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Freestanding SAR. </B>An SAR that is not associated with an Option and is granted under Section&nbsp;10.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Grant Date. </B>The later of <B>&#091;1&#093; </B>the date the Committee establishes the terms of an Award or <B>&#091;2&#093; </B>the
date specified in the Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Group. </B>The Company and all Related Entities. The composition of the Group will be determined as
of any relevant date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Incentive Stock Option. </B>Any Option granted under Section&nbsp;6.00 that, on the Grant Date, meets the
conditions imposed under Code &#167;422 and is not subsequently modified in a manner inconsistent with
Code &#167;422.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Nonstatutory Stock Option. </B>Any Option granted under Section&nbsp;6.00 that is not an Incentive Stock
Option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Option. </B>The right granted to a Participant to purchase a share of Stock at a stated price for a
specified period of time. Subject to Section&nbsp;6.00, an Option may be either <B>&#091;1&#093; </B>an Incentive Stock
Option or <B>&#091;2&#093; </B>a Nonstatutory Stock Option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Participant. </B>Any Consultant, Employee or Eligible Director to whom an Award has been granted and
is still outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Performance-Based Award. </B>An Award granted subject to Section&nbsp;11.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Performance Criteria. </B>The criteria described in Section&nbsp;11.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Performance Period. </B>The period over which the Committee will determine if applicable Performance
Criteria have been met.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Performance Share. </B>An Award granted under Section&nbsp;9.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Performance Unit. </B>An Award granted under Section&nbsp;9.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Plan. </B>The DSW Inc. 2005 Equity Incentive Plan.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Plan Year. </B>The Company&#146;s fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Registration Statement. </B>The Form S-1 Registration Statement filed with the Securities and Exchange
Commission on March&nbsp;14, 2005 (Registration #333-123289), as amended at the time it is declared
effective by the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Related Board. </B>The board of directors of any incorporated Related Entity or the governing body of
any unincorporated Related Entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Related Entity. </B>Any corporation, partnership or other form of unincorporated entity <B>&#091;1&#093; </B>of which
the Company owns, directly or indirectly, 50&nbsp;percent or more of the total combined voting power of
all classes of stock, if the entity is a corporation, or of the capital or profits interest, if the
entity is a partnership or another form of unincorporated entity or <B>&#091;2&#093; </B>except when identifying
Related Boards, which owns 50&nbsp;percent or more of the total combined voting power of all classes of
the Stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Restricted Stock. </B>An Award granted under Section&nbsp;8.01.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Restricted Stock Unit. </B>An Award granted under Section&nbsp;8.02.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Restriction Period. </B>The period over which the Committee will determine if a Participant has met
conditions placed on Restricted Stock or Restricted Stock Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Retirement. </B>Unless the Committee specifies otherwise in the Award Agreement, the date:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>An Employee Terminates on or after reaching age 65 and completing at least five years of service; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>An Eligible Director Terminates as a Board or a Related Board member after completing one
full term as a member of the Board or the board of directors of a Related Entity after
reaching age 65.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>For purposes of applying this definition:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>No Consultant will be deemed to have &#147;Retired&#148; regardless of the circumstances
surrounding his or her Termination;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>A Participant&#146;s status as an Employee or an Eligible Director will be determined
as of the Grant Date applicable to each affected Award; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>An Eligible Director serving on the Board and/or one or more Related Boards may
Retire from one board while continuing to serve as a member of other Group boards (or
governing bodies). In this case, the Eligible Director&#146;s Retirement will affect only
Awards granted with respect to his or her service on the board (or other governing
body) from which he or she is Retiring.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Stock. </B>The Class&nbsp;A common shares, without par value, issued by the Company or any security issued
by the Company in substitution, exchange or in place of these shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Stock Appreciation Right (or &#147;SAR&#148;). </B>An Award granted under Section&nbsp;10.00 that is a Tandem SAR, an
Affiliated SAR or a Freestanding SAR.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Stock Unit. </B>A right to receive payment of the Fair Market Value of a share of Stock as provided in
Section&nbsp;7.00.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Tandem SAR. </B>An SAR that is associated with an Option and which expires when that Option expires or
is exercised, as described in Section&nbsp;10.00.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Terminate.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Unless the Committee specifies otherwise in the Award Agreement:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Cessation of the employee-employer relationship between an Employee and the
Company and all Related Entities for any reason;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>A Participant who is an Employee of a Related Entity at a Grant Date <B>&#091;i&#093; </B>will not
be treated as having Terminated solely because his or her employer ceases to be a
Related Entity and that individual continues to be
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">employed by the former Related Entity (in which case the former employee will be
treated as having Terminated or not Terminated under this definition as if the former
Related Entity had remained a Related Entity) but <B>&#091;ii&#093; </B>will be treated as having
Terminated if (and to the extent that) his or her Award is replaced by the former
Related Entity following procedures and principles described in Code &#167;424 within 90
days after the disaffiliation;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>With respect to a Participant who is a Consultant, a cessation of the service
relationship between the Consultant and the Company and all Related Entities, unless
there is a simultaneous reengagement of the Consultant by the Company or a Related
Entity;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;d&#093; </B>With respect to a Participant who is an Eligible Director, cessation of his or her
service on the Board or a Related Board for any reason.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>For purposes of this definition:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>An Eligible Director serving on the Board and/or one or more Related Boards may
Terminate from one board while continuing to serve as a member of other Related
Boards. In this case, the Eligible Director&#146;s Termination will affect only Awards
granted with respect to his or her Terminating board membership.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>With respect to any Award (including an Incentive Stock Option granted to an
Employee) a Termination will not have occurred while the Employee is absent from
active employment for a period of not more than three months (or, if longer, the
period during which reemployment rights are protected by law, contract or written
agreement, including the Award Agreement, between the Participant and the Company) due
to illness, military service or other leave of absence approved by the Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>Subject to other rules described in the Plan and the Award Agreement, an Employee
whose status changes from an Employee to a Consultant will not be treated as having
Terminated. In these circumstances, the former Employee will be treated as having
Terminated under rules applicable to Consultants.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>3.00 PARTICIPATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>3.01 Participation.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Consistent with the terms of the Plan and subject to Section&nbsp;3.02, the Committee
will <B>&#091;a&#093; </B>decide which Consultants, Employees and Eligible Directors will be granted Awards;
and <B>&#091;b&#093; </B>specify the type of Award to be granted and the terms upon which an Award will be
granted and may be earned.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>The Committee may establish different terms and conditions <B>&#091;a&#093; </B>for each type of Award,
<B>&#091;b&#093; </B>for each Participant receiving the same type of Award; and <B>&#091;c&#093; </B>for the same Participant
for each Award the Participant receives, whether or not those Awards are granted at different
times.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>The Committee (or the Board, as appropriate) also may amend the Plan and the Award
Agreements without any additional consideration to affected Participants to the extent
necessary to avoid penalties arising under Code &#167;409A, even if those amendments reduce,
restrict or eliminate rights granted under the Plan or Award Agreement (or both) before those
amendments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>Unless permitted by Code &#167;409A, no Award subject to Code &#167;409A will be granted under this
Plan to any person who is performing services only for an entity that is not an affiliate of
the Company within the meaning of Code &#167;&#167;414(b) and (c).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>3.02 Conditions of Participation. </B>By accepting an Award, each Participant agrees:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>To be bound by the terms of the Award Agreement and the Plan and to comply with other
conditions imposed by the Committee; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>That the Committee (or the Board, as appropriate) may amend the Plan and the Award
Agreements without any additional consideration to the extent necessary to avoid penalties
arising under Code &#167;409A, even if those amendments reduce, restrict or eliminate rights
granted under the Plan or Award Agreement (or both) before those amendments.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>4.00 ADMINISTRATION</B>
</DIV>


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</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>4.01 Committee Duties. </B>The Committee is responsible for administering the Plan and has all powers
appropriate and necessary to that purpose. Consistent with the Plan&#146;s objectives, the Committee
may adopt, amend and rescind rules and regulations relating to the Plan, to the extent appropriate
to protect the Company&#146;s and the Group&#146;s interests, and has complete discretion to make all other
decisions (including whether a Participant has incurred a Disability) necessary or advisable for
the administration and interpretation of the Plan. Any action by the Committee will be final,
binding and conclusive for all purposes and upon all persons.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>4.02 Delegation of Ministerial Duties. </B>In its sole discretion, the Committee may delegate any
ministerial duties associated with the Plan to any person (including Employees) that it deems
appropriate. However, the Committee may not delegate any duties it is required to discharge under
Code &#167;162(m).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>4.03 Award Agreement. </B>At the time an Award is made, the Committee will prepare and deliver an Award
Agreement to each affected Participant. The Award Agreement:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Will describe <B>&#091;a&#093; </B>the type of Award and when and how it may be exercised or earned and
<B>&#091;b&#093; </B>any Exercise Price associated with each Award.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>To the extent different from the terms of the Plan, will describe <B>&#091;a&#093; </B>any conditions that
must be met before the Award may be exercised or earned, <B>&#091;b&#093; </B>any objective restrictions
placed on Awards and any performance-related conditions and Performance Criteria that must be
met before those restrictions will be released and <B>&#091;c&#093; </B>any other applicable terms and
conditions affecting the Award.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>4.04 Restriction on Repricing. </B>Regardless of any other provision of this Plan, neither the Company
nor the Committee may &#147;reprice&#148; (as defined under rules issued by the exchange on which the Stock
is then traded) any Award without the prior approval of the shareholders.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>5.00 STOCK SUBJECT TO PLAN</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>5.01 Number of Shares of Stock. </B>Subject to Section&nbsp;5.03, the number of shares of Stock issued
under the Plan may not be larger than 7,600,000, of which up to 7,600,000 may be issued through
Incentive Stock Options. The shares of Stock to be delivered under the Plan may consist, in whole
or in part, of treasury Stock or authorized but unissued Stock not reserved for any other purpose.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>5.02 Unfulfilled Awards. </B>Any Stock subject to an Award that, for any reason, is forfeited,
cancelled, terminated, relinquished, exchanged or otherwise settled without the issuance of Stock
or without payment of cash equal to the difference between the Award&#146;s Fair Market Value and its
Exercise Price (if any) may again be granted under the Plan and, in the discretion of the Committee
and subject to the limits described in Section&nbsp;5.01, may be subject to a subsequent Award. Any
decision by the Committee under this section will be final and binding on all Participants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>5.03 Adjustment in Capitalization. </B>If, after the Effective Date, there is a Stock dividend or
Stock split, recapitalization (including payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to shareholders, exchange of shares,
or other similar corporate change affecting Stock, the Committee will appropriately adjust <B>&#091;1&#093; </B>the
number of Awards that may or will be granted to Participants during a Plan Year, <B>&#091;2&#093; </B>the aggregate
number of shares of Stock available for Awards under Section&nbsp;5.01 or subject to outstanding Awards
(as well as any share-based limits imposed under this Plan), <B>&#091;3&#093; </B>the respective Exercise Price,
number of shares and other limitations applicable to outstanding or subsequently granted Awards and
<B>&#091;4&#093; </B>any other factors, limits or terms affecting any outstanding or subsequently granted Awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>5.04 Limits on Awards to Covered Officers. </B>During any Plan Year, no Covered Officer may receive
<B>&#091;1&#093; </B>Options and Stock Appreciation Rights covering more than 500,000 shares (adjusted as provided
in Section&nbsp;5.03), including Awards that are cancelled &#091;or deemed to have been cancelled under
Treas. Reg. &#167;1.162-27(e)(2)(vi)(B)&#093; during each Plan Year granted, or <B>&#091;2&#093; </B>other Awards covering
more than 100,000 shares (adjusted as provided in Section&nbsp;5.03), including Awards that are
cancelled &#091;or deemed to have been cancelled under Treas. Reg. &#167;1.162-27(e)(2)(vi)(B)&#093; during each
Plan Year granted.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>6.00 OPTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.01 Grant of Options. </B>At any time during the term of this Plan, the Committee may grant
<B>&#091;1&#093; </B>Incentive Stock Options or Nonstatutory Stock Options to Employees and <B>&#091;2&#093; </B>Nonstatutory Stock
Options to Consultants and Eligible Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.02 Exercise Price. </B>Except as required to implement Section&nbsp;6.06, each Option will bear an
Exercise Price at least equal to Fair Market Value on the Grant Date. However, the Exercise Price
associated with an Incentive Stock Option will be at least 110
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">percent of the Fair Market Value of a share of Stock on the Grant Date with respect to any
Incentive Stock Options issued to an Employee who, on the Grant Date, owns &#091;as defined in Code
&#167;424(d)&#093; Stock possessing more than 10&nbsp;percent of the total combined voting power of all classes of
Stock (or the combined voting power of any Related Entity), determined under rules issued under
Code &#167;422.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.03 Exercise of Options. </B>Subject to any terms, restrictions and conditions specified in the Plan
and unless specified otherwise in the Award Agreement:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Options granted to Employees and Consultants will be exercisable according to the
following schedule:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number of Full Years Beginning After</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Grant Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Cumulative Percentage Vested</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">1 but fewer than 2
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">20&nbsp;percent</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">2 but fewer than 3
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">40&nbsp;percent</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">3 but fewer than 4
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">60&nbsp;percent</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">4 but fewer than 5
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">80&nbsp;percent</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">5 or more
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">100&nbsp;percent</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regardless of the vesting schedule just described but subject to Section&nbsp;12.00 and the terms of the
Award Agreement, Options that are not exercisable at Termination will be fully and immediately
exercisable <B>&#091;a&#093; </B>in the case of an Employee, if the Employee Terminates because of death, Retirement
or Disability or <B>&#091;b&#093; </B>in the case of a Consultant, the Consultant Terminates because of death or
Disability. In all other cases (but subject to Section&nbsp;12.00), Options issued to an Employee or
Consultant that are not exercisable when the Employee or Consultant Terminates for any other reason
will be forfeited.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Options granted to Eligible Directors will be exercisable:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>12 complete consecutive calendar months beginning after the Grant Date, if the
Eligible Director has not then Terminated; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Will be fully and immediately exercisable if the Eligible Director Terminates
because of death, Retirement or Disability but will be forfeited if the Eligible
Director Terminates for any other reason.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>However:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Any Option to purchase a fraction of a share of Stock will automatically be
converted to an Option to purchase an additional whole share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Unless the Committee specifies otherwise in the Award Agreement, no Participant
may exercise Options for fewer than the smaller of <B>&#091;i&#093; </B>100 shares of Stock or <B>&#091;ii&#093; </B>the
full number of shares of Stock for which Options are then exercisable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>No Option may be exercised more than ten years after it is granted (five years in
the case of an Incentive Stock Option granted to an Employee who owns &#091;as defined in
Code &#167;424(d)&#093; on the Grant Date Stock possessing more than 10&nbsp;percent of the total
combined voting power of all classes of Stock or the combined voting power of any
Related Entity, determined under rules issued under Code &#167;422).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.04 Incentive Stock Options. </B>Notwithstanding anything in the Plan to the contrary:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>No provision of this Plan relating to Incentive Stock Options will be interpreted,
amended or altered, nor will any discretion or authority granted under the Plan be exercised,
in a manner that is inconsistent with Code &#167;422 or, without the consent of any affected
Participant, to cause any Incentive Stock Option to fail to qualify for the federal income
tax treatment afforded under Code &#167;421.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>The aggregate Fair Market Value of the Stock (determined as of the Grant Date) with
respect to which Incentive Stock Options are exercisable for the first time by any
Participant during any calendar year (under all option plans of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Company and all Related
Entities of the Company) will not exceed $100,000 &#091;or other amount specified in Code
&#167;422(d)&#093;, determined under rules issued under Code &#167;422.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>No Incentive Stock Option will be granted to any person who is not an Employee on the
Grant Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>An Incentive Stock Option granted to an Employee who, without Terminating, <B>&#091;a&#093; </B>becomes a
Consultant after the Grant Date or <B>&#091;b&#093; </B>is no longer an Employee because he or she is employed
by an entity that no longer is a Related Entity, <B>&#091;c&#093; </B>will be treated as a Nonstatutory Stock
Option beginning at the end of the third month after the former Employee becomes a Consultant
or the date the former Employee&#146;s employer no longer is a Related Entity, whichever is
applicable.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.05 Exercise of and Payment for Options. </B>Unless the Committee specifies otherwise in the Award
Agreement, the Exercise Price associated with each Option must be paid in cash. However, the
Committee may, in its discretion, develop and extend to some or all Participants, other procedures
through which Participants may pay the Exercise Price, including a cashless exercise and allowing a
Participant to tender Stock he or she already has owned for at least six months before the exercise
date, either by actual delivery of the previously owned Stock or by attestation, valued at its Fair
Market Value on the exercise date, as partial or full payment of the Exercise Price. A Participant
may exercise an Option only by sending to the Committee a completed exercise notice (in the form
prescribed by the Committee) along with payment of the Exercise Price. As soon as administratively
feasible after those steps are taken, the Committee will issue to the Participant the appropriate
share certificates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.06 Substitution of Options. </B>In the Committee&#146;s discretion, persons who become Employees as a
result of a transaction described in Code &#167;424(a) or Employees holding options issued by a former
Related Entity at the occurrence of a transaction described in Code &#167;424(a) may receive Options in
exchange for options granted by their former employer or the former Related Entity subject to the
rules and procedures prescribed under Code &#167;424.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>6.07 Transferability of Stock. </B>Unless the Committee specifies otherwise in the Award Agreement or
as otherwise specifically provided in the Plan, Stock acquired through an Option will be
transferable, subject to applicable federal securities laws, the requirements of any national
securities exchange or system on which shares of Stock are then listed or traded or any blue sky or
state securities laws.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>7.00 STOCK UNITS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>7.01 Granting Stock Units</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Subject to the terms of this Plan, the Committee may grant Stock Units to Employees,
Eligible Directors, and Consultants at any time during the term of this Plan under the terms
and conditions that the Committee specifies in the Award Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>On the last day of the fiscal quarter during which the Company completes the initial
public offering of the Company&#146;s stock which is the subject of the Registration Statement,
each Eligible Director will automatically receive 3,100 Stock Units.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>Each Eligible Director may elect to have any Annual Retainer payable in cash (including
any amount paid for service as the chair of a Board committee) automatically converted to
Stock Units by returning to the Committee an Annual Retainer Deferral Form. The Committee
may, in its sole discretion, reject any election made on an Annual Retainer Deferral Form.
Any election under this subsection must be made in a manner acceptable to the Committee and
be consistent with rules described in Section&nbsp;7.03. If this election is made, the electing
Eligible Director will receive a number of Stock Units determined by dividing the portion of
the Annual Retainer subject to this election by the Fair Market Value of a share of Stock on
the Grant Date, which will coincide with the date that the affected portion of the Annual
Retainer otherwise would have been paid in cash.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>If provided in the Award Agreement, a Dividend Equivalent Right also may be granted in
connection with any Stock Unit. If granted, the right to receive any Dividend Equivalent
Right will be forfeited or paid in cash or in the form of additional Stock Units (as provided
in the Award Agreement) when the associated Stock Unit is forfeited or settled.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>7.02 Settling Stock Units.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Stock Units always will be settled in shares of Stock unless the Award Agreement
specifies another form of settlement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Subject to Committee approval and the terms of the Award Agreement, all Stock Units will
be settled as of <B>&#091;a&#093; </B>the date specified in the Award Agreement, in the case of Stock Units
issued to Employees and Consultants or <B>&#091;b&#093; </B>in
the case of Stock Units issued to Eligible Directors under Section&nbsp;7.01&#091;2&#093; and &#091;3&#093;, the date
the Eligible Director Terminates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>If Stock Units are to be settled in cash, the amount distributed will be calculated by
multiplying the number of Stock Units to be settled in cash by their Fair Market Value.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>If Stock Units are to be settled in shares of Stock, the number of shares of Stock
distributed will equal the whole number of Stock Units to be settled in Stock, with the Fair
Market Value of any fractional share of Stock distributed in cash.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;5&#093; </B>If a Participant dies or becomes Disabled before all of his or her Stock Units have been
settled, the value of any unpaid Stock Units will be paid in a lump sum in shares of Stock to
his or her Beneficiary.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>7.03 Election Procedures. </B>To be effective, an election under Section&nbsp;7.01&#091;3&#093; may be made only by
returning a completed Annual Retainer Deferral Form to the Committee no later than:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>The last day preceding the calendar year for which the Annual Retainer is earned and
otherwise would have been paid in cash; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Not later than 30&nbsp;days after the Eligible Director first becomes eligible to make an
election under this section, although an election under this subpart will apply only to the
portion of the Annual Retainer attributable to services performed after the date of that
election.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Once filed, elections made on an Annual Retainer Deferral Form may be revoked or changed by filing
a subsequent Annual Retainer Deferral Form with the Committee and subject to approval by the
Committee. However, that revocation or change will be effective only with respect to any Annual
Retainer to be earned for any calendar year beginning after the effective date of the revocation or
change.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>8.00 RESTRICTED STOCK/RESTRICTED STOCK UNITS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>8.01 Restricted Stock. </B>Subject to the terms of this Plan, the Committee may grant Restricted Stock
to Participants at any time during the term of this Plan under terms and conditions that the
Committee specifies in the Award Agreement.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated
or hypothecated until the end of the applicable Restriction Period. At the Committee&#146;s sole
discretion, all shares of Restricted Stock will:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Be held by the Company as escrow agent during the Restriction Period; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Be issued to the Participant in the form of certificates bearing a legend
describing the restrictions imposed on the shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Restricted Stock will be:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Forfeited (or if shares were issued to the Participant for a cash payment, those
shares will be resold to the Company for the amount paid), if all restrictions have
not been met at the end of the Restriction Period, and again become available under
the Plan; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Released from escrow and distributed (or any restrictions described in the
certificate removed) as soon as practicable after the last day of the Restriction
Period, if all restrictions have then been met.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>During the Restriction Period, and unless the Award Agreement provides otherwise, each
Participant to whom Restricted Stock has been issued as described in Section&nbsp;8.01&#091;1&#093;&#091;b&#093;:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>May exercise full voting rights associated with that Restricted Stock; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Will be entitled to receive all dividends and other distributions paid with
respect to that Restricted Stock; provided, however, that if any dividends or other
distributions are paid in shares of Stock, those shares
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">will be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted Stock
with respect to which they were issued.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>8.02 Restricted Stock Units. </B>Subject to the terms of this Plan, the Committee may grant
Restricted Stock Units to Participants at any time during the term of this Plan under terms and
conditions that the Committee specifies in the Award Agreement and to the terms of the Plan.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Restricted Stock Units may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Restricted Stock Units will be:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Forfeited, if all restrictions have not been met at the end of the Restriction
Period, and again become available under the Plan; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Settled in shares of Stock unless the Award Agreement specifies another form of
settlement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>If Restricted Stock Units are settled <B>&#091;a&#093; </B>in shares of Stock, the number of shares of
Stock distributed will be equal to the number of Restricted Stock Units to be settled, <B>&#091;b&#093; </B>in
cash, the amount distributed will be equal to the number of Restricted Stock Units to be
settled multiplied by the Fair Market Value of a share of Stock on the settlement date or
<B>&#091;c&#093; </B>in a combination of shares of Stock or cash, the number of shares of Stock distributed
and the amount of cash distributed will be computed under subpart 8.02&#091;3&#093;&#091;a&#093; and &#091;b&#093;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>During the Restriction Period, Participants may not exercise any voting rights associated
with the shares of Stock underlying his or her Restricted Stock Units or to receive any
dividends or other distributions otherwise payable with respect to the shares of Stock
underlying his or her Restricted Stock Units.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>8.03 Vesting. </B>Subject to any terms, restrictions and conditions specified in the Plan or the Award
Agreement and unless specified otherwise in the Award Agreement, time-based restrictions imposed on
Restricted Stock or Restricted Stock Units will lapse under the following schedule:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Number of Full Years Beginning After</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 0px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Grant Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Cumulative Percentage Vested</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Fewer than 4
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">0&nbsp;percent</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">4 or more
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">100&nbsp;percent</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also, and unless the Committee specifies otherwise in the Award Agreement, restrictions that have
not lapsed at Termination will fully lapse <B>&#091;a&#093; </B>in the case of an Employee or Eligible Director, if
the Employee or Eligible Director Terminates because of death, Retirement or Disability or <B>&#091;b&#093; </B>in
the case of a Consultant, the Consultant Terminates because of death or Disability. However,
Restricted Stock and Restricted Stock Units subject to restrictions when the Participant Terminates
for any other reason will be forfeited.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>9.00. PERFORMANCE SHARES AND PERFORMANCE UNITS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>9.01 Generally. </B>Any Award may be granted <B>&#091;1&#093; </B>to Covered Officers in a manner that qualifies as
&#147;performance-based compensation&#148; under Code &#167;162(m) or <B>&#091;2&#093; </B>to Employees who are not Covered
Officers or to Consultants in a manner determined by the Committee. Subject to any terms,
restrictions and conditions specified in the Plan and the Award Agreement, the granting or vesting
of Performance Shares and Performance Units will, in the Committee&#146;s sole discretion, be based on
achieving performance objectives derived from one or more of the Performance Criteria.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>9.02 Earning Performance Shares and Performance Units. </B>Except as otherwise provided in the Plan
or the Award Agreement, as of the end of each Performance Period, the Committee will certify to the
Board the extent to which each Participant has or has not met his or her Performance Criteria and
Performance Shares or Performance Units will be:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Forfeited, to the extent that Performance Criteria have not been met at the end of the
Performance Period, and again become available to be granted under the Plan; or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Valued and distributed, in a single lump sum, to Participants, in the form of cash, Stock
or a combination of both (as specified by the Committee in the Award Agreement) as soon as
practicable after the last day of the Performance Period to the extent that related
Performance Criteria have been met.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>9.03 Rights Associated with Performance Shares and Performance Units. </B>During the Performance
Period, and unless the Award Agreement provides otherwise:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Participants may not exercise voting rights associated with their Performance Shares or
Performance Units; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>All dividends and other distributions paid with respect to any Performance Shares or
Performance Units will be held by the Company as escrow agent during the Performance Period.
At the end of the Performance Period, these dividends (and other distributions) will be
distributed to the Participant or forfeited as provided in Section&nbsp;9.02. No interest or
other accretion will be credited with respect to any dividends (and other distributions) held
in this escrow account. If any dividends or other distributions are paid in shares of Stock,
those shares will be subject to the same restrictions on transferability and forfeitability
as the shares of Stock with respect to which they were issued.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>10.00 STOCK APPRECIATION RIGHTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.01 SAR Grants. </B>Subject to the terms of the Plan, the Committee may grant Affiliated SARs,
Freestanding SARs and Tandem SARs (or a combination of each) to Employees or Consultants at any
time during the term of this Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.02 Exercise Price. </B>Unless the Committee specifies otherwise in the Award Agreement, the
Exercise Price specified in the Award Agreement will:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>In the case of an Affiliated SAR, not be less than 100&nbsp;percent of the Fair Market Value
of a share of Stock on the Grant Date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>In the case of a Freestanding SAR, not be less than 100&nbsp;percent of the Fair Market Value
of a share of Stock on the Grant Date; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>In the case of a Tandem SAR, not be less than the Exercise Price of the related Option.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.03 Exercise of Affiliated SARs. </B>Affiliated SARs will be deemed to be exercised on the date the
related Option is exercised. However:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>An Affiliated SAR will expire no later than the date the related Option expires;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>The value of the payout with respect to the Affiliated SAR will not be more than the
Exercise Price of the related Option; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>An Affiliated SAR may be exercised only if the Fair Market Value of the shares of Stock
subject to the related Option is larger than the Exercise Price of the related Option.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.04 Exercise of Freestanding SARs. </B>Freestanding SARs will be exercisable subject to the terms
specified in the Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.05 Exercise of Tandem SARs. </B>Tandem SARs may be exercised with respect to all or part of the
shares of Stock subject to the related Option by surrendering the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only with respect to the shares of
Stock for which its related Option is then exercisable. However:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>A Tandem SAR will expire no later than the date the related Option expires or is
exercised;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>The value of the payout with respect to the Tandem SAR will not be more than 100&nbsp;percent
of the difference between the Exercise Price of the related Option and the Fair Market Value
of a share of Stock subject to the related Option at the time the Tandem SAR is exercised;
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>A Tandem SAR may be exercised only if the Fair Market Value of a share of Stock subject
to the Option is larger than the Exercise Price of the related Option.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>10.06 Settling SARs.</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>A Participant exercising a Tandem SAR or a Freestanding SAR will receive an amount equal to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>The difference between the Fair Market Value of a share of Stock on the exercise
date and the Exercise Price multiplied by
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>The number of shares of Stock with respect to which the Tandem SAR or Freestanding
SAR is exercised.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Tandem SARs and Freestanding SARs always will be settled in shares of Stock unless the
Award Agreement specifies another form of settlement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>A Participant will not receive any cash or other amount when exercising an Affiliated
SAR. Instead, the value of the Affiliated SAR being exercised will be applied to reduce (but
not below zero) the Exercise Price of the related Option.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the discretion of the Committee, the value of any Tandem SAR or Freestanding SAR being exercised
will be settled in cash, shares of Stock or any combination of both.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>11.00 PERFORMANCE-BASED AWARD</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>11.01 Generally. </B>Any Award granted under the Plan to <B>&#091;1&#093; </B>Covered Officers may be granted in a
manner that qualifies as &#147;performance-based compensation&#148; under Code &#167;162(m) or <B>&#091;2&#093; </B>Employees who
are not Covered Officers or who are Consultants, may be granted in a manner determined by the
Committee. As determined by the Committee in its sole discretion, either the granting or vesting
of Performance-Based Awards will be based on achieving performance objectives derived from one or
more of the Performance Criteria over the Performance Period established by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>11.02 Performance Criteria.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>The payment or vesting of an Award to a Covered Officer that is intended to qualify as
&#147;performance-based compensation&#148; under Code &#167;162(m) will be based on one or more (or a
combination) of the following Performance Criteria and may be applied solely with reference
to the Company (and/or any Related Entity) or relatively between the Company (and/or any
Related Entity) and one or more unrelated entities:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Net earnings or net income (before or after taxes);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>Earnings per share;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>Net sales or revenue growth;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;d&#093; </B>Net operating profit;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;e&#093; </B>Return measures (including, but not limited to, return on assets, capital,
invested capital, equity, sales or revenue);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;f&#093; </B>Cash flow (including, but not limited to, operating cash flow, free cash flow,
cash flow return on equity and cash flow return on investment);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;g&#093; </B>Earnings before or after taxes, interest, depreciation and/or amortization;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;h&#093; </B>Gross or operating margins;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;i&#093; </B>Productivity ratios;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;j&#093; </B>Share price (including, but not limited to, growth measures and total shareholder return);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;k&#093; </B>Expense targets;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;l&#093; </B>Margins;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;m&#093; </B>Operating efficiency;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;n&#093; </B>Market share;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;o&#093; </B>Customer satisfaction;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;p&#093; </B>Working capital targets; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;q&#093; </B>Economic value added (net operating profit after tax minus the sum of capital
multiplied by the cost of capital).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>The payment or vesting of an Award to Participants who are not Covered Officers may be
based on one or more (or a combination) of the Performance Criteria listed in
Section&nbsp;11.02&#091;1&#093; or on other factors the Committee believes are relevant and appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>Different Performance Criteria may be applied to individual Participants or to groups of
Participants and, as specified by the Committee, may be based on the results achieved
<B>&#091;a&#093; </B>separately by the Company or any Related Entity<B>, &#091;b&#093; </B>any combination of the Company and
Related Entities<B>, </B>or <B>&#091;c&#093; </B>any combination of segments, products or divisions of the Company
and Related Entities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>The Committee:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Will make appropriate adjustments to Performance Criteria to reflect the effect on
any Performance Criteria of any stock dividend or stock split affecting Stock,
recapitalization (including, without limitation, the payment of an extraordinary
dividend), merger, consolidation, combination, spin-off, distribution of assets to
shareholders, exchange of shares or similar corporate change. Also, the Committee
will make a similar adjustment to any portion of a Performance Criteria that is not
based on Stock but which is affected by an event having an effect similar to those
just described.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>May make appropriate adjustments to Performance Criteria to reflect a substantive
change in a Participant&#146;s job description or assigned duties and responsibilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;5&#093; </B>Performance Criteria will be established in an Award Agreement <B>&#091;a&#093; </B>as soon as
administratively practicable after established but <B>&#091;b&#093; </B>in the case of Covered Officers, no
later than the earlier of <B>&#091;i&#093; </B>90&nbsp;days after the beginning of the applicable Performance
Period or <B>&#091;ii&#093; </B>the expiration of 25&nbsp;percent of the applicable Performance Period.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>11.03 Earning Awards. </B>Subject to any terms, restrictions and conditions specified in the Plan or
the Award Agreement, as of the end of each Performance Period, the Committee will certify to the
Board the extent to which each Participant has or has not met his or her Performance Criteria.
Performance-Based Awards will be:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Forfeited, if Performance Criteria have not been met at the end of the Performance
Period; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>Subject to Section&nbsp;5.04, valued and distributed as soon as practicable after the last day
of the Performance Period to the extent that related Performance Criteria have been met.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>12.00 TERMINATION/BUY OUT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.01 Retirement. </B>Unless otherwise specified in the Award Agreement or this Plan, all Awards that
are exercisable when a Participant Retires may be exercised at any time before the earlier of
<B>&#091;1&#093; </B>the expiration date specified in the Award Agreement or <B>&#091;2&#093; </B>one year (three months in the case
of Incentive Stock Options) after the Retirement date (or any shorter period specified in the Award
Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.02 Death or Disability. </B>Unless otherwise specified in the Award Agreement or this Plan, all
Awards that are exercisable when a Participant Terminates because of death or Disability may be
exercised by the Participant or the Participant&#146;s Beneficiary at any time before the earlier of
<B>&#091;1&#093; </B>the expiration date specified in the Award Agreement or <B>&#091;2&#093; </B>one year after the date of death or
Termination because of Disability (or any shorter period specified in the Award Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.03 Termination for Cause. </B>Unless otherwise specified in the Award Agreement or this Plan, all
Awards that are outstanding (whether or not then exercisable) will be forfeited if a Participant
Terminates (or is deemed to have been Terminated) for Cause.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.04 Termination for any Other Reason. </B>Unless otherwise specified in the Award Agreement or this
Plan or subsequently, any Awards that are outstanding when a Participant Terminates for any reason
not described in Sections&nbsp;12.01 through 12.03 and which are then exercisable, or which the
Committee has, in its sole discretion, decided to make exercisable, may be exercised at
any time before the earlier of <B>&#091;1&#093; </B>the expiration date specified in the Award Agreement or <B>&#091;2&#093; </B>90
days after the Termination date (or any shorter period specified in the Award Agreement) and all
Awards that are not then exercisable will terminate on the Termination date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.05 Expiration of Options in Connection with Termination Associated with Merger, Etc. </B>Unless
otherwise provided in an Award Agreement or this Plan), Options held by a Participant who
Terminates in connection with a transaction described in Code &#167;424 will expire immediately upon the
date of Termination but only if and to the extent that another party to that transaction will grant
substitute options in exchange for the Options to be cancelled and otherwise comply with the rules
and procedures prescribed under the provisions of Code &#167;424 governing that substitution. In all
other cases, Options held by a Participant who Terminates in connection with a transaction
described in Code &#167;424, will expire as otherwise provided in this Plan and the Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>12.06 Buy Out of Awards.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>At any time before a Change in Control or the commencement of activity that may
reasonably be expected to result in a Change in Control, the Committee, in its sole
discretion and without the consent of the affected Participant, may cancel any or all
outstanding Awards (other than an Award subject to Code &#167;409A) held by that Participant,
whether or not exercisable, by providing to that Participant written notice (&#147;Buy Out
Notice&#148;) of its intention to exercise the rights reserved in this section. If a Buy Out
Notice is given, in the case of an Option, the Company also will pay to each affected
Participant the difference between <B>&#091;a&#093; </B>the Fair Market Value of the Stock underlying each
exercisable Option (or portion of an Option) to be cancelled and <B>&#091;b&#093; </B>the Exercise Price
associated with each exercisable Option to be cancelled. With respect to any Award other
than an Option, the Company will pay to each affected Participant the Fair Market Value of
the Stock subject to the Award. However, unless otherwise specified in the Award Agreement,
no payment will be made with respect to any Awards that are not exercisable or are subject to
a restriction when cancelled under this section. The Company will complete any buy out made
under this section as soon as administratively possible after the date of the Buy Out Notice.
At the Committee&#146;s option, payment of the buy out amount may be made in cash, in whole
 shares of Stock or partly in cash and partly in shares of Stock. The number of whole shares
of Stock, if any, included in the buy out amount will be determined by dividing the amount of
the payment to be made in shares of Stock by the Fair Market Value as of the date of the Buy
Out Notice.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>At any time before a Change in Control or the commencement of activity that may
reasonably be expected to result in a Change in Control, the Committee, in its sole
discretion, may offer to buy for cash or by substitution of another Award any or all
outstanding Awards (other than an Award subject to Code &#167;409A) held by any Participant,
whether or not exercisable, by providing to that Participant written notice (&#147;Buy Out Offer&#148;)
of its intention to exercise the rights reserved in this section and other information, if
any, required to be included under applicable security laws. If a Buy Out Offer is given,
the Company also will transfer to each Participant accepting the offer the value (determined
under procedures adopted by the Committee) of the Award to be purchased or exchanged. The
Company will complete any buy out made under this section as soon as administratively
possible after the date of the Buy Out Offer and the shares of Stock subject to the Awards
purchased will be recredited as provided in Section&nbsp;5.02.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>13.00 CHANGE IN CONTROL</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>13.01 Accelerated Vesting and Settlement. </B>Subject to Section&nbsp;13.02, on the date of any Change in
Control:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; &#091;a&#093; </B>Each Option outstanding on the date of a Change in Control (whether or not
exercisable) will be cancelled in exchange <B>&#091;i&#093; </B>for cash equal to the excess of the Change in
Control Price over the Exercise Price associated with the cancelled Option or, <B>&#091;ii&#093; </B>at the
Committee&#146;s discretion, for whole shares of Stock with a Fair Market Value equal to the
excess of the Change in Control Price over the Exercise Price associated with the cancelled
Option and the Fair Market Value of any fractional share of Stock will be distributed in
cash, and <B>&#091;b&#093; </B>all related Affiliated and Tandem SARs will be cancelled;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>All Performance Criteria associated with Performance Shares or Performance Units will be
deemed to have been met on the date of the Change in Control, all Performance Periods will be
accelerated to the date of the Change in Control and all outstanding Performance Shares and
Performance Units (including those subject to the acceleration described in this subpart)
will be distributed in a single lump sum cash payment;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>All Freestanding SARs will be deemed to be exercisable and will be liquidated in a single
lump sum cash payment;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093; </B>All Stock Units will be distributed immediately in the form provided in the Annual
Retainer Deferral Form; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;5&#093; </B>All restrictions then imposed on Restricted Stock or Restricted Stock Units will lapse.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>13.02 Effect of Code &#167;280G. </B>Unless otherwise specified in the Award Agreement or in another
written agreement between the Participant and the Company or a Related Entity executed
simultaneously with or before any Change in Control, if the sum (or value) of the payments
described in Section&nbsp;13.01 constitute an &#147;excess parachute payment&#148; as defined in Code &#167;280G(b)(1)
when combined with all other parachute payments attributable to the same Change in Control, the
Company or other entity making the payment (&#147;Payor&#148;) will reduce the Participant&#146;s benefits under
this Plan so that the Participant&#146;s total &#147;parachute payment&#148; as defined in Code &#167;280G(b)(2)(A)
under this Plan, an Award Agreement and all other agreements will be $1.00 less than the amount
that otherwise would generate an excise tax under Code &#167;4999. If the reduction described in the
preceding sentence applies, within 10 business days of the effective date of the event generating
the payments (or, if later, the date of the Change in Control), the Payor will apprise the
Participant of the amount of the reduction (&#147;Notice of Reduction&#148;). Within 10 business days of
receiving that information, the Participant may specify how and against which benefit or payment
source, (including benefits and payment sources other than this Plan) the reduction is to be
applied (&#147;Notice of Allocation&#148;). The Payor will be required to implement these directions within
10 business days of receiving the Notice of Allocation. If the Payor has not received a Notice of
Allocation from the Participant within 10 business days of the date of the Notice of Reduction or
if the allocation provided in the Notice of Allocation is not sufficient to fully implement the
reduction described in this section, the Payor will apply the reduction described in this section
proportionately based on the amounts otherwise payable under Section&nbsp;13.01 or, if a Notice of
Allocation has been returned that does not sufficiently implement the reduction described in this
section, on the basis of the reductions specified in the Notice of Allocation.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>14.00 AMENDMENT, MODIFICATION AND TERMINATION OF PLAN</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board or the Committee may terminate, suspend or amend the Plan at any time without shareholder
approval except to the extent that shareholder approval is required to satisfy applicable
requirements imposed by <B>&#091;1&#093; </B>Rule&nbsp;16b-3 under the Act, or any successor rule or regulation,
<B>&#091;2&#093; </B>applicable requirements of the Code or <B>&#091;3&#093; </B>any securities exchange, market or other quotation
system on or through which the Company&#146;s securities are listed or traded. Also, no Plan amendment
may <B>&#091;4&#093; </B>result in the loss of a Committee member&#146;s status as a &#147;non-employee director&#148; as defined
in Rule&nbsp;16b-3 under the Act, or any successor rule or regulation, with respect to any employee
benefit plan of the Company, <B>&#091;5&#093; </B>cause the Plan to fail to meet requirements imposed by Rule&nbsp;16b-3
or <B>&#091;6&#093; </B>without the consent of the affected Participant (and except as specifically provided
otherwise in this Plan or the Award Agreement), adversely affect any Award granted before the
amendment, modification or termination. However, nothing in this section will restrict the
Committee&#146;s right to exercise the discretion retained in Section&nbsp;12.06 or the right to amend the
Plan and any Award Agreements without any additional consideration to affected Participants to the
extent necessary to avoid penalties arising under Code &#167;409A, even if those amendments reduce,
restrict or eliminate rights granted under the Plan or Award Agreement (or both) before those
amendments.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>15.00 MISCELLANEOUS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.01 Assignability. </B>Except as described in this section, an Award may not be transferred except
by will or the laws of descent and distribution and, during the Participant&#146;s lifetime, may be
exercised only by the Participant or the Participant&#146;s guardian or legal representative. However,
with the permission of the Committee, a Participant or a specified group of Participants may
transfer Awards (other than Incentive Stock Options) to a revocable inter vivos trust, of which the
Participant is the settlor, or may transfer Awards (other than Incentive Stock Options) to any
member of the Participant&#146;s immediate family, any trust, whether revocable or irrevocable,
established solely for the benefit of the Participant&#146;s immediate family, any partnership or
limited liability company whose only partners or members are members of the Participant&#146;s immediate
family or an organization described in Code &#167;501(c)(3) (&#147;Permissible Transferees&#148;). Any Award
transferred to a Permissible Transferee will continue to be subject to all of the terms and
conditions that applied to the Award before the transfer and to any other rules prescribed by the
Committee. A Permissible Transferee &#091;other than an organization described in Code &#167;501(c)(3)&#093; may
not retransfer an Award except by will or the laws of descent and distribution and then only to
another Permissible Transferee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.02 Beneficiary Designation. </B>Each Participant may name a Beneficiary or Beneficiaries (who may
be named contingently or successively) to receive or to exercise any vested Award that is unpaid or
unexercised at the Participant&#146;s death. Each designation made will revoke all prior designations
made by the same Participant, must be made on a form prescribed by the Committee and will be
effective only when filed in writing with the Committee. If a Participant has not made an
effective Beneficiary designation, the deceased Participant&#146;s Beneficiary will be his or her
surviving spouse or, if none, the deceased
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Participant&#146;s estate. The identity of a Participant&#146;s
designated Beneficiary will be based only on the information included in the latest beneficiary
designation form completed by the Participant and will not be inferred from any other evidence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.03 No Guarantee of Continuing Services. </B>Nothing in the Plan may be construed as:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>Interfering with or limiting the right of the Company or any Related Entity to Terminate
any Employee&#146;s employment at any time;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093;
</B> Conferring on any Participant any right to continue as an Employee or director of the
Company or any Related Entity;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093;</B>
Guaranteeing that any Employee will be selected to be a Participant; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;4&#093;</B>
Guaranteeing that any Participant will receive any future Awards.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.04 Tax Withholding.</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;1&#093; </B>The Company will withhold from other amounts owed to the Participant, or require a
Participant to remit to the Company, an amount sufficient to satisfy federal, state and local
withholding tax requirements on any Award, exercise or cancellation of an Award or purchase
of Stock. If these amounts are not to be withheld from other payments due to the Participant
(or if there are no other payments due to the Participant), the Company will defer payment of
cash or issuance of shares of Stock until the earlier of:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>Thirty days after the settlement date; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>The date the Participant remits the required amount.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;2&#093; </B>If the Participant has not remitted the required amount within 30&nbsp;days after the
settlement date, the Company will permanently withhold from the value of the Awards to be
distributed the minimum amount required to be withheld to comply with applicable federal,
state and local income, wage and employment taxes and distribute the balance to the
Participant.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>&#091;3&#093; </B>In its sole discretion, which may be withheld for any reason or for no reason, the
Committee may permit a Participant to elect, subject to conditions the Committee establishes,
to reimburse the Company for this tax withholding obligation through one or more of the
following methods:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;a&#093; </B>By having shares of Stock otherwise issuable under the Plan withheld by the
Company (but only to the extent of the minimum amount that must be withheld to comply
with applicable state, federal and local income, employment and wage tax laws);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;b&#093; </B>By delivering to the Company previously acquired shares of Stock that the
Participant has owned for at least six months;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;c&#093; </B>By remitting cash to the Company; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>&#091;d&#093; </B>By remitting a personal check immediately payable to the Company.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.05 Indemnification. </B>Each individual who is or was a member of the Committee or of the Board
will be indemnified and held harmless by the Company against and from any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be made a party or in
which he or she may be involved by reason of any action taken or not taken under the Plan as a
Committee or Board member and against and from any and all amounts paid, with the Company&#146;s
approval, by him or her in settlement of any matter related to or arising from the Plan as a
Committee or Board member or paid by him or her in satisfaction of any judgment in any action, suit
or proceeding relating to or arising from the Plan against him or her as a Committee or Board
member, but only if he or she gives the Company an opportunity, at its own expense, to handle and
defend the matter before he or she undertakes to handle and defend it in his or her own behalf.
The right of indemnification described in this section is not exclusive and is independent of any
other rights of indemnification to which the individual may be entitled under the Company&#146;s
organizational documents, by contract, as a matter of law or otherwise.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.06 No Limitation on Compensation. </B>Nothing in the Plan is to be construed to limit the right of
the Company to establish other plans or to pay compensation to its employees or directors, in cash
or property, in a manner not expressly authorized under the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.07 Requirements of Law. </B>The grant of Awards and the issuance of shares of Stock will be subject
to all applicable laws, rules and regulations and to all required approvals of any governmental
agencies or national securities exchange, market or other
quotation system. Also, no shares of Stock will be issued under the Plan unless the Company is
satisfied that the issuance of those shares of Stock will comply with applicable federal and state
securities laws. Certificates for shares of Stock delivered under the Plan may be subject to any
stock transfer orders and other restrictions that the Committee believes to be advisable under the
rules, regulations and other requirements of the Securities and Exchange Commission, any stock
exchange or other recognized market or quotation system upon which the Stock is then listed or
traded, or any other applicable federal or state securities law. The Committee may cause a legend
or legends to be placed on any certificates issued under the Plan to make appropriate reference to
restrictions within the scope of this section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.08 Governing Law. </B>The Plan, and all agreements hereunder, will be construed in accordance with
and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>15.09 No Impact on Benefits. </B>Plan Awards are incentives designed to promote the objectives
described in Section&nbsp;1.00. Also, Awards are not compensation for purposes of calculating a
Participant&#146;s rights under any employee benefit plan that does not specifically require the
inclusion of Awards in calculating benefits.
</DIV>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23.1
<SEQUENCE>3
<FILENAME>l36650aexv10w23w1.htm
<DESCRIPTION>EX-10.23.01
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.23.01</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><b>Exhibit&nbsp;10.23.1</b>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
RESTRICTED STOCK UNITS AGREEMENT</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><I>Summary of Terms</I>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Awardee Name:</B></DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Grant Date:</B></DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Award Type:</B>
</DIV>&nbsp;</TD>
    <TD align="left" valign="top">Restricted Stock Units</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Number of Shares:</B></DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Vesting Schedule:</B></DIV>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
<TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
RESTRICTED STOCK UNITS AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement is entered into in Franklin County, Ohio. On <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Grant Date&#148;), DSW
Inc., an Ohio corporation (the &#147;Company&#148;), has awarded to <U>&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (&#147;Awardee&#148;) <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Restricted
Stock Units (the &#147;Restricted Stock Units&#148; or &#147;Award&#148;), representing an unfunded unsecured promise
of the Company to deliver common shares, without par value, of the Company (the &#147;Shares&#148;) to
Awardee as set forth herein. The Restricted Stock Units have been granted pursuant to the DSW Inc.
2005 Equity Incentive Plan, as amended (the &#147;Plan&#148;), and shall be subject to all provisions of the
Plan, which are incorporated herein by reference, and shall be subject to the provisions of this
Restricted Stock Units Agreement (this &#147;Agreement&#148;). Capitalized terms used in this Agreement which
are not specifically defined shall have the meanings ascribed to such terms in the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><U><B>Vesting</B></U><B>. </B>The Restricted Stock Units shall vest on the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> anniversary of the
Grant Date (the &#147;Vesting Date&#148;), subject to the provisions of this agreement, including those
relating to the Awardee&#146;s continued employment with the Company or any Related Entity.
Notwithstanding the foregoing, in the event of a Change in Control prior to Awardee&#146;s Employment
Termination, the Restricted Stock Units shall vest in full.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><U><B>Transferability</B></U><B>. </B>The Restricted Stock Units shall not be transferable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><U><B>Termination of Employment</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>General</U>. Except as set forth below or as otherwise provided for in another
agreement, if an Employment Termination occurs prior to the vesting of a Restricted Stock Unit,
such Restricted Stock Unit shall be forfeited by Awardee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Death and Disability</U>. If an Employment Termination occurs prior to the vesting in
full of the Restricted Stock Units by reason of Awardee&#146;s death or Disability, then any unvested
Restricted Stock Units shall immediately vest in full and shall not be forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Retirement</U>. If an Employment Termination occurs prior to the vesting in full of
the Restricted Stock Units by reason of the Awardee&#146;s Retirement, then any unvested Restricted
Stock Units shall immediately vest in full and shall not be forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><U><B>Payment</B></U><B>. </B>Awardee shall be entitled to receive from the Company (without any
payment on behalf of Awardee other than as described in Paragraph&nbsp;8) the Stock represented by such
Restricted Stock Unit; provided, however, that in the event that such Restricted Stock Units vest
prior to the applicable Vesting Date as a result of the death, Disability or Retirement of Awardee
or as a result of a Change in Control, Awardee shall be entitled to receive the corresponding Stock
from the Company on the date of such vesting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><U><B>Dividend Equivalents</B></U><B>. </B>Until Awardee&#146;s Restricted Stock Units are settled and Stock
is delivered to Awardee, Awardee shall not receive cash dividends from the Company on the
Restricted Stock Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><U><B>Right of Set-Off</B></U><B>. </B>By accepting these Restricted Stock Units, Awardee consents to a
deduction from, and set-off against, any amounts owed to Awardee by the Company or a Related Entity
from time to time (including, but not limited to, amounts owed to Awardee as wages, severance
payments or other fringe benefits) to the extent of the amounts owed to the Company or a Related
Entity by Awardee under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><U><B>No Shareholder Rights</B></U><B>. </B>Awardee shall have no rights of a shareholder with respect
to the Restricted Stock Units, including, without limitation, Awardee shall not have the right to
vote the Stock represented by the Restricted Stock Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><U><B>Withholding Tax</B></U><B>.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Generally</U>. Awardee is liable and responsible for all taxes owed in connection with
the Restricted Stock Units regardless of any action the Company takes with respect to any tax
withholding obligations that arise in connection with the Restricted Stock Units. The Company does
not make any representation or undertaking regarding the tax treatment or the treatment of any tax
withholding in connection with the grant or vesting of the Restricted Stock Units or the subsequent
sale of Stock issuable pursuant to the Restricted Stock Units. The Company does not commit and is
under no obligation to structure the Restricted Stock Units to reduce or eliminate Awardee&#146;s tax
liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Payment of Withholding Taxes</U>. Prior to any event in connection with the Restricted
Stock Units (e.g., vesting or settlement) that the Company determines may result in any domestic or
foreign tax withholding obligation, whether national, federal, state or local, including any
employment tax obligation (the &#147;Tax Withholding Obligation&#148;), Awardee is required to arrange for
the satisfaction of the minimum amount of such Tax Withholding Obligation in a manner acceptable to
the Company. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative
means that is then permitted by the Company, Awardee&#146;s acceptance of this Agreement constitutes
Awardee&#146;s instruction and authorization to the Company to withhold on Awardee&#146;s behalf the number
of shares from those Shares issuable to Awardee at the time when the Restricted Stock Units become
vested and payable as the Company determines to be sufficient to satisfy the Tax Withholding
Obligation. In the case of any amounts withheld for taxes pursuant to this provision in the form of
shares, the amount withheld shall not exceed the minimum required by applicable law and
regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Governing Law/Venue for Dispute Resolution</B></U><B>. </B>This Agreement shall be governed by
the laws of the State of Ohio, without regard to principles of conflicts of law, except to the
extent superceded by the laws of the United States of America. <B>The parties agree and acknowledge
that the laws of the State of Ohio bear a substantial relationship to the parties and/or this
Agreement and that the Restricted Stock Units and benefits granted herein would not be granted
without the governance of this Agreement by the laws of the State of Ohio. In addition, all legal
actions or proceedings relating to this Agreement shall be brought exclusively in state or federal
courts located in Franklin County, Ohio and the parties executing this Agreement hereby consent to
the personal jurisdiction of such courts. </B>Any provision of this Agreement which is determined by a
court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a
manner that is valid and enforceable and that comes closest to the business objectives intended by
such provision, without invalidating or rendering unenforceable the remaining provisions of this
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;</B><U><B>Action by the Committee</B></U><B>. </B>The parties agree that the interpretation of this
Agreement shall rest exclusively and completely within the sole discretion of the Committee. The
parties agree to be bound by the decisions of the Committee with regard to the interpretation of
this Agreement and with regard to any and all matters set forth in this Agreement. The Committee
may delegate its functions under this Agreement to an officer of the Company designated by the
Committee (hereinafter the &#147;Designee&#148;). In fulfilling its responsibilities hereunder, the Committee
or its Designee may rely upon documents, written statements of the parties or such other material
as the Committee or its Designee deems appropriate. The parties agree that there is no right to be
heard or to appear before the Committee or its Designee and that any decision of the Committee or
its Designee relating to this Agreement shall be final and binding unless such decision is
arbitrary and capricious.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;</B><U><B>Prompt Acceptance of Agreement</B></U><B>. </B>The Restricted Stock Unit grant evidenced by this
Agreement shall, at the discretion of the Committee, be forfeited if this Agreement is not manually
executed and returned to the Company, or electronically executed by Awardee by indicating Awardee&#146;s
acceptance of this Agreement in accordance with the acceptance procedures set forth on the
Company&#146;s third-party equity plan administrator&#146;s web site, within 90&nbsp;days of the Grant Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;</B><U><B>Electronic Delivery and Consent to Electronic Participation</B></U><B>. </B>The Company may, in
its sole discretion, decide to deliver any documents related to the Restricted Stock Unit grant
under and participation in the Plan or future Restricted Stock Units that may be granted under the
Plan by electronic means or to request Awardee&#146;s consent to participate in the Plan by electronic
means. Awardee hereby consents to receive such documents by electronic delivery and to participate
in the Plan through an on-line or electronic system established and maintained by the Company or
another third party designated
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by the Company, including the acceptance of restricted stock unit grants and the execution of
restricted stock unit agreements through electronic signature.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.&nbsp;</B><U><B>Notices</B></U><B>. </B>All notices, requests, consents and other communications required or
provided under this Agreement to be delivered by Awardee to the Company will be in writing and will
be deemed sufficient if delivered by hand, facsimile, nationally recognized overnight courier, or
certified or
registered mail, return receipt requested, postage prepaid, and will be effective upon delivery to
the Company at the address set forth below:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">DSW Inc.<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219<BR>
Attention: Chief Legal Officer<BR>
Facsimile: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All notices, requests, consents and other communications required or provided under this Agreement
to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be
deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier,
or certified or registered mail, return receipt requested, postage prepaid, and will be effective
upon delivery to the Awardee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;</B><U><B>Employment Agreement, Offer Letter or Other Arrangement</B></U><B>. </B>To the extent a written
employment agreement, offer letter or other arrangement (&#147;Employment Arrangement&#148;) that was
approved by the Compensation Committee or the Board of Directors or that was approved in writing by
an officer of the Company pursuant to delegated authority of the Compensation Committee provides
for greater benefits to Awardee with respect to vesting of the Award on Employment Termination,
than provided in this agreement or in the plan, then the terms of such Employment Arrangement with
respect to vesting of the Award on Employment Termination by reason of such specified events shall
supersede the terms hereof to the extent permitted by the terms of the plan under which the Award
was made.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">DSW INC.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Its:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">SVP, Human Resources</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>ACCEPTANCE OF AGREEMENT </U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Awardee hereby: (a)&nbsp;acknowledges that he or she has received a copy of the Plan, a copy of the
Company&#146;s most recent annual report to shareholders and other communications routinely distributed
to the Company&#146;s shareholders, and a copy of the plan
description (Prospectus) dated May&nbsp;21, 2009
pertaining to the Plan; (b)&nbsp;accepts this Agreement and the Restricted Stock Units granted to him or
her under this Agreement subject to all provisions of the Plan and this Agreement; (c)&nbsp;represents
that he or she understands that the acceptance of this Agreement through an on-line or electronic
system, if applicable, carries the same legal significance as if he or she manually signed the
Agreement; (d)&nbsp;represents and warrants to the Company that he or she is purchasing the Restricted
Stock Units for his or her own account, for investment, and not with a view to or any present
intention of selling or distributing the Restricted Stock Units either now or at any specific or
determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or
reasonably foreseeable event; and (e)&nbsp;agrees that no transfer of the Stock delivered in respect of
the Restricted Stock Units shall be made unless the Stock have been duly registered under all
applicable Federal and state securities laws pursuant to a then-effective registration which
contemplates the proposed transfer or unless the Company has received a written opinion of, or
satisfactory to, its legal counsel that the proposed transfer is exempt from such registration.<BR>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Awardee&#146;s Signature</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23.2
<SEQUENCE>4
<FILENAME>l36650aexv10w23w2.htm
<DESCRIPTION>EX-10.23.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.23.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><b>Exhibit&nbsp;10.23.2</b>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
2005 EQUITY INCENTIVE PLAN</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>FORM OF STOCK UNITS<BR>
GRANTED TO <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> ON </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DSW Inc. (&#147;Company&#148;) and its shareholders believe that their business interests are best
served by extending to you an opportunity to earn additional compensation based on the growth of
the Company&#146;s business. To this end, the Company and its shareholders adopted the DSW Inc. 2005
Equity Incentive Plan (&#147;Plan&#148;) as a means through which you may share in the Company&#146;s success.
This is done by granting Awards to directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Award Agreement describes many features of your Award and the conditions you must meet before
you may receive the value associated with your Award. To ensure you fully understand these terms
and conditions, you should:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Read the Plan and the Plan&#146;s Prospectus carefully to ensure you understand how the
Plan works;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Read this Award Agreement carefully to ensure you understand the nature of your
Award and what must happen if you are to earn it; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Contact DSW&#146;s Senior Vice President, Human Resources at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>if you have any
questions about your Award.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also, no later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> you must return a signed copy of the Award Agreement to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Senior Vice President, Human Resources<BR>
DSW<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you do not do this, your Award will be revoked automatically as of the Grant Date and you will
not be entitled to receive anything on account of the retroactively revoked Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;409A of the Internal Revenue Code (&#147;Section&nbsp;409A&#148;) imposes substantial penalties on persons
who receive some forms of deferred compensation (see the Plan&#146;s Prospectus for more information
about these penalties). Your Award has been designed to avoid these penalties. However, because
of uncertainty in the application of Section&nbsp;409A, it may be necessary to revise your Award
Agreement if you are to avoid these penalties. As a condition of accepting this Award, you must
agree to accept those revisions, without any further consideration, even if those revisions change
the terms of your Award and reduce its value or potential value.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nature of Your Award</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You have been granted an Award consisting of Stock Units, which will be converted to common shares
of the Company if the conditions described in this Award Agreement are met. Federal income tax
rules apply to the payment of your Award. These and other conditions affecting your Award are
described in this Award Agreement, the Plan and the Plan&#146;s Prospectus, all of which you should read
carefully.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, you must return a signed copy of this Award Agreement to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Senior Vice President, Human Resources<BR>
DSW<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you do not do this, your Award will be revoked automatically as of the Grant Date and you will
not be entitled to receive anything on account of the retroactively revoked Award.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Grant Date: </B>Your Stock Units were granted on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and it also is the date your Stock Units vested.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Number of Stock Units: </B>You have been granted <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>Stock Units in payment of a portion of your annual
retainer. Although these Stock Units are not actual shares of Company stock, they will be credited
with &#147;dividends&#148; at the same rate and at the same time dividends are paid on actual shares of
Company Stock. These dividends will be converted to additional Stock Units based on the amount of
dividends paid and the Fair Market Value (as defined in the Plan) of a share of Company stock.
These additional Stock Units will be distributed at the same time and subject to the same terms and
conditions that apply to other Stock Units granted with this Award Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The conditions that must be met before the Award is converted into shares of Company stock are
discussed below in the Section titled &#147;When Your Award Will Be Settled.&#148;
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>When Your Award Will Be Settled</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Normal Settlement: </B>Your Stock Units normally will be settled and converted to an equal number of
shares of Company stock when you leave the Company&#146;s board of directors (provided such termination
of service constitutes a separation from service within the meaning of Section&nbsp;409A).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>How Your Stock Units Might Be Settled Before the Normal Settlement Date: </B>If there is a Change in
Control (as defined in the Plan) before the Normal Settlement Date, your Stock Units will be
settled as of the date of the Change in Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>How Your Stock Units May Be Forfeited: </B>You will forfeit any Stock Units if, before they are
settled and before Change in Control, your board service ends because:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You materially fail to substantially perform your position or duties;</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You engage in illegal or grossly negligent conduct that is materially injurious
to the Company or any Related Entity (as defined in the Plan);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You materially violate any law or regulation governing the Company or any
Related Entity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You commit a material act of fraud or dishonesty which has had or is likely to
have a material adverse effect upon the Company&#146;s (or any Related Entity&#146;s)
operations or financial conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You materially breach the terms of any other agreement with the Company or any
Related Entity; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>You breach any term of the Plan or this Award Agreement.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also, if you terminate your board service for any reason other than those just listed and the
Company subsequently discovers that you actively concealed an act, event or failure that is within
those just listed and the Company could not have discovered that act, event or failure through
reasonable diligence before your termination, you will be required to repay to the Company the full
value you received under this Award.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Settling Your Award</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Your Stock Units will be settled automatically soon after your board service ends. At that time,
you will receive one share of Company stock for each Stock Unit.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Other Rules&nbsp;Affecting Your Award</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Rights Before Your Stock Units Are Settled: </B>Until your Stock Units are settled, you may not
exercise any voting rights associated with the shares underlying your Stock Units. See Section
titled &#147;Nature of Your Award &#151; Number of Stock Units for a description of how dividends will be
paid on your Stock Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Beneficiary Designation: </B>You may name a Beneficiary or Beneficiaries to receive any Stock Units to
be settled after you die. This may be done only on the attached Beneficiary Designation Form and
by following the rules described in that form and in the Plan. If you die without making an
effective Beneficiary designation with respect to this Award, the Stock Units subject to this Award
will be converted to shares and distributed to your surviving spouse or, if you do not have a
surviving spouse, to your estate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Tax Withholding: </B>You (and not the Company) are solely responsible for any income and other taxes
(including payment of estimated taxes) associated with this Award or its conversion to shares of
Company stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Transferring Your Stock Units: </B>Normally, your Stock Units may not be transferred to another
person. However, you may complete a Beneficiary Designation Form to name the person to receive any
Stock Units settled after you die. Also, the Committee may allow you to place your Stock Units
into a trust established for your benefit or the benefit of your family. Contact
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DSW&#146;s Senior Vice President, Human Resources at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> or at the address given below if you are
interested in doing this.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Governing Law: </B>This Award Agreement will be construed in accordance with and governed by the laws
of the United States and the laws of the State of Ohio (other than laws governing conflicts of
laws).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Other Agreements: </B>Also, your Stock Units will be subject to the terms of any other written
agreements between you and the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Adjustments to Your Stock Units: </B>Your Stock Units will be adjusted, if appropriate, to reflect any
change to the Company&#146;s capital structure (e.g., the number of your Stock Units will be adjusted to
reflect a stock split).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Other Rules: </B>Your Stock Units also are subject to more rules described in the Plan and in the
Plan&#146;s Prospectus. You should read both these documents carefully to ensure you fully understand
all the conditions of this Award.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Tax Treatment of Your Award</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The federal income tax treatment of your Stock Units is discussed in the Plan&#146;s Prospectus.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">*****
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may contact DSW&#146;s Senior Vice President, Human Resources at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> or at the address given
below if you have any questions about your Award or this Award Agreement.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">*****
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Your Acknowledgment of Award Conditions</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Note: </I></B><I>You must sign and return a copy of this Award Agreement to DSW&#146;s Senior Vice President,
Human Resources at the address given below no later than </I><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><I>.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By signing below, I acknowledge and agree that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A copy of the Plan has been made available to me;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have received a copy of the Plan&#146;s Prospectus;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I understand and accept the conditions placed on my Award and understand what I must
do to earn my Award;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I will consent (in my own behalf and in behalf of my beneficiaries and without any
further consideration) to any change to my Award or this Award Agreement to avoid
paying penalties under Section&nbsp;409A of the Internal Revenue Code, even if those changes
affect the terms of my Award and reduce its value or potential value; and</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If I do not return a signed copy of this Award Agreement to the address shown below
before &#171;RETURN_DATE&#187;, my Award will be revoked automatically as of the date it was
granted and I will not be entitled to receive anything on account of the retroactively
revoked Award.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">(signature)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="white-space: nowrap">Date signed:</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed copy of this form must be sent to the following address no later than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Senior Vice President, Human Resources<BR>
DSW<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">*****
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Committee&#146;s Acknowledgment of Receipt</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed copy of this Award Agreement was received on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">By: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Has complied with the conditions imposed on the grant and the Award and the Award
Agreement remains in effect; or</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Has not complied with the conditions imposed on the grant and the Award and the Award
Agreement are revoked as of the Grant Date because</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><I>describe deficiency</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">DSW Inc. 2005 Equity Incentive Plan Committee</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Note: </I></B><I>Send a copy of this completed form to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and keep a copy as part of the Plan&#146;s permanent
records.</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
2005 EQUITY INCENTIVE PLAN<BR>
BENEFICIARY DESIGNATION FORM</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>RELATING TO STOCK UNITS ISSUED TO <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
ON </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Instructions for Completing This Form</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may use this form to <B>&#091;1&#093; </B>name the person you want to receive any amount due under the DSW Inc.
2005 Equity Incentive Plan after your death or <B>&#091;2&#093; </B>change the person who will receive these
benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are several things you should know before you complete this form.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>First</B>, if you do not elect another Beneficiary, any amount due to you under the Plan when you die
will be paid to your surviving spouse or, if you have no surviving spouse, to your estate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Second</B>, your election will not be effective (and will not be implemented) unless you sign this
form.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Third, </B>your election will be effective only if and when this form is completed properly and
returned to DSW&#146;s Senior Vice President, Human Resources at the address given below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Fourth</B>, all elections will remain in effect until they are changed (or until all death benefits are
paid).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Fifth</B>, if you designate your spouse as your Beneficiary but are subsequently divorced from that
person (or your marriage is annulled), your Beneficiary designation will be revoked automatically.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Sixth</B>, if you have any questions about this form or if you need additional copies of this form,
please contact DSW&#146;s Senior Vice President, Human Resources at <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>or at the address given
below.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>1.00 Designation of Beneficiary</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.01 Primary Beneficiary:</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">I designate the following persons as my Primary Beneficiary or Beneficiaries to receive
any shares of DSW stock due after my death under the terms of the Award Agreement described at the
top of this form. These shares will be allocated, in the proportion specified to:
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1.02 Contingent Beneficiary</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If one or more of my Primary Beneficiaries dies before I die, I direct that </I></B>any shares of DSW stock
due after my death under the terms of the Award Agreement described at the top of this form:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Be allocated to my other named Primary Beneficiaries in proportion to the allocation
given above (ignoring the interest allocated to the deceased Primary Beneficiary); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Be paid to my other named Primary Beneficiaries in proportion to the allocation given
above (ignoring the interest allocated to the deceased Primary Beneficiary); or</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

<TD><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Be
distributed among the following Contingent Beneficiaries.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>% to</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="2" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>

    <TD align="center" valign="top">&nbsp;</TD>

    <TD colspan="4" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Name)
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">(Relationship)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 6pt">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>****</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Elections made on this form will be effective only after this form is received by DSW&#146;s Senior Vice
President, Human Resources and only if it is fully and properly completed and signed.</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="82%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">


<TD  colspan="3" align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000; margin-left: 5%">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="white-space: nowrap">Soc. Sec. No.:</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="white-space: nowrap">Date of Birth:</FONT></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">

<TD  colspan="3" align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000;margin-left: 7%">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt">
    <TD colspan="3" valign="top" align="left" style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Sign and return this form to DSW&#146;s Senior Vice President, Human Resources at the address given
below.</I>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Signature
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Return this signed form to DSW&#146;s Senior Vice President, Human Resources at the following address:</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Senior Vice President, Human Resources<BR>
DSW<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Received on: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
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<DOCUMENT>
<TYPE>EX-10.23.6
<SEQUENCE>5
<FILENAME>l36650aexv10w23w6.htm
<DESCRIPTION>EX-10.23.6
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.23.6</TITLE>
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><b>Exhibit&nbsp;10.23.6</b>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NONQUALIFIED STOCK OPTION AGREEMENT</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><I>Summary of Terms</I>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
<TD width="10%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Awardee Name:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Grant Date:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Award Type:</B>
</DIV></TD>
    <TD align="left" valign="top">Nonqualified Stock Option</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Number of Shares:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
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<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Exercise Price:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
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<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Vesting Schedule:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Expiration Date:</B></DIV></TD>
    <TD align="left" valign="top">&nbsp;</TD>
<TD></TD>
</TR>
<TR style="font-size: 1px">
<TD></TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
<TD></TD>
</TR>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DSW INC.<BR>
NONQUALIFIED STOCK OPTION AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement is entered into in Franklin County, Ohio. On <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Grant Date&#148;),
DSW Inc., an Ohio corporation (the &#147;Company&#148;), has awarded to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (&#147;Awardee&#148;), an option
(the &#147;Option&#148;) to purchase <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>common shares, without par value, of the Company (the
&#147;Shares&#148;) for a price of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>per share. The Option has been granted under the DSW Inc.
2005 Equity Incentive Plan (the &#147;Plan&#148;), and will include and be subject to all provisions of the
Plan, which are incorporated herein by reference, and will be subject to the provisions of this
agreement. Capitalized terms used in this agreement which are not specifically defined will have
the meanings ascribed to such terms in the Plan. This Option shall vest and become exercisable in
five installments, which shall be as nearly equal as possible, on the first five anniversaries of
the Grant Date (each, the &#147;Vesting Date&#148; with respect to the portion of the Option scheduled to
vest on such date), subject to the provisions of this agreement, including those relating to the
Awardee&#146;s continued employment with the Company or a Related Entity. Notwithstanding the foregoing,
in the event of a Change in Control prior to Awardee&#146;s Termination of Employment, the vesting of
the Option shall be accelerated and settled in accordance with the terms of Section&nbsp;13 of the Plan.
This Option shall expire on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>(the &#147;Grant Expiration Date&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><U><B>Method of Exercise and Payment of Price</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Method of Exercise</U>. At any time when all of the Option or a portion of the Option
(such portion not to be fewer than 100 Shares or the total number of Shares then underlying such
Option) is exercisable under the Plan and this agreement, some or all of the exercisable portion of
the Option may be exercised from time to time by written notice to the Company, or such other
method of exercise as may be specified by the Company, including without limitation, exercise by
electronic means on the web site of the Company&#146;s third-party equity plan administrator, which
will:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;state the number of whole Shares with respect to which the Option is being exercised; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;if the Option is being exercised by anyone other than Awardee, if not already provided,
be accompanied by proof satisfactory to counsel for the Company of the right of such person or
persons to exercise the Option under the Plan and all applicable laws and regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Payment of Price</U>. The full exercise price for the portion of the Option being
exercised shall be paid to the Company as provided below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;in cash;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;by check or wire transfer (denominated in U.S. Dollars);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;subject to any conditions or limitations established by the Committee, other Shares
which (A)&nbsp;in the case of Shares acquired from the Company (whether upon the exercise of an Option
or otherwise), have been owned by the Participant for more than six months on the date of surrender
(unless this condition is waived by the Committee), and (B)&nbsp;have a Fair Market Value on the date of
surrender equal to or greater than the aggregate exercise price of the Shares as to which said
Option shall be exercised (it being agreed that the excess of the Fair Market Value over the
aggregate exercise price shall be refunded to the Awardee, with any fractional Share being repaid
in cash);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;consideration received by the Company under a broker-assisted sale and remittance program
acceptable to the Committee; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;any combination of the foregoing methods of payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><U><B>Transferability</B></U><B>. </B>The Option shall be transferable (I)&nbsp;at Awardee&#146;s death, by
Awardee by will or pursuant to the laws of descent and distribution, or (II)&nbsp;subject to the
Committee&#146;s discretion, by Awardee during Awardee&#146;s lifetime pursuant to trust law.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><U><B>Termination of Employment</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Employment Termination by Reason of Death or Disability.</U> If employment Termination
occurs by reason of death or Disability prior to the vesting in full of the Option, then any
unvested portion of the Option shall vest upon and become exercisable in full from and after such
death or Disability. The Option may thereafter be exercised by the Awardee, a Beneficiary, or any
transferee of Awardee, if applicable, for a period of one year from the date of such death or
Disability until the Grant Expiration Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Employment Termination by Reason of Retirement</U>. If employment Termination occurs
by reason of Retirement prior to the vesting in full of the Option, then any unvested portion of
the Option shall vest upon and become exercisable in full from and after such Retirement. The
Option may thereafter be exercised by the Awardee, a Beneficiary, or any transferee of Awardee, if
applicable, for a period of one year from the date of such Retirement until the Grant Expiration
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U>Other Employment Termination</U>. Except as otherwise provided for in another
agreement, if employment Termination occurs by any reason other than death, Disability or
Retirement, any unexercised portion of the Option which has not vested on such date of employment
Termination will automatically be forfeited. Subject to Section&nbsp;12.03 of the Plan, Awardee (or any
transferee, if applicable) will have 90&nbsp;days from the date of employment Termination or until the
Grant Expiration Date, whichever period is shorter, to exercise any portion of the Option that is
vested and exercisable on the date of employment Termination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><U><B>Restrictions on Exercise</B></U><B>. </B>The Option is subject to all restrictions in this
agreement and/or in the Plan. As a condition of any exercise of the Option, the Company may require
Awardee or his or her transferee or successor to make any representation and warranty to comply
with any applicable law or regulation or to confirm any factual matters reasonably requested by the
Company. The Option shall not be exercisable if such exercise would involve a violation of any
applicable law or regulation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><U><B>Right of Set-Off</B></U><B>. </B>By accepting this Option, Awardee consents to a deduction from,
and set-off against, any amounts owed to Awardee by the Company or any Related Entity from time to
time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other
fringe benefits) to the extent of the amounts owed to the Company or any Related Entity by Awardee
under this agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><U><B>Withholding Tax</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Generally</U>. Awardee is liable and responsible for all taxes owed in connection with
the exercise of the Option, regardless of any action the Company takes with respect to any tax
withholding obligations that arise in connection with the Option. The Company does not make any
representation or undertaking regarding the tax treatment or the treatment of any tax withholding
in connection with the exercise of the Option. The Company does not commit and is under no
obligation to structure the Option or the exercise of the Option to reduce or eliminate Awardee&#146;s
tax liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<U>Payment of Withholding Taxes</U>. Concurrently with the payment of the exercise price
pursuant to paragraph 1 hereof, Awardee is required to arrange for the satisfaction of the minimum
amount of any domestic or foreign tax withholding obligation, whether national, federal, state or
local, including any employment tax obligation (the &#147;Tax Withholding Obligation&#148;) in a manner
acceptable to the Company. Any manner provided for in subparagraph 1(b) hereof shall be deemed an
acceptable manner to satisfy the Tax Withholding Obligation unless otherwise determined by the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><U><B>Governing Law/Venue for Dispute Resolution</B></U><B>. </B>This agreement shall be governed by
the laws of the State of Ohio, without regard to principles of conflicts of law, except to the
extent superseded by the laws of the United States of America. <B>The parties agree and acknowledge
that the laws of the State of Ohio bear a substantial relationship to the parties and/or this
agreement and that the Option and benefits granted herein would not be granted without the
governance of this agreement by the laws of the State of Ohio. In addition, all legal actions or
proceedings relating to this agreement shall be brought exclusively in state or federal courts
located in Franklin County, Ohio and the parties executing this agreement hereby consent to the
personal jurisdiction of such</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>courts. </B>Any provision of this agreement which is determined by a court of competent
jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is
valid and enforceable and that comes closest to the business objectives intended by such provision,
without invalidating or rendering unenforceable the remaining provisions of this agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><U><B>Action by the Committee</B></U><B>. </B>The parties agree that the interpretation of this
agreement shall rest exclusively and completely within the sole discretion of the Committee. The
parties agree to be bound by the decisions of the Committee with regard to the interpretation of
this agreement and with regard to any and all matters set forth in this agreement. The Committee
may delegate its functions under this agreement to an officer of the Company designated by the
Committee (hereinafter the &#147;designee&#148;). In fulfilling its responsibilities hereunder, the Committee
or its designee may rely upon documents, written statements of the parties or such other material
as the Committee or its designee deems appropriate. The parties agree that there is no right to be
heard or to appear before the Committee or its designee and that any decision of the Committee or
its designee relating to this agreement shall be final and binding unless such decision is
arbitrary and capricious.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Prompt Acceptance of Agreement</B></U><B>. </B>The Option grant evidenced by this agreement
shall, at the discretion of the Committee, be forfeited if this agreement is not manually executed
and returned to the Company, or electronically executed by Awardee by indicating Awardee&#146;s
acceptance of this agreement in accordance with the acceptance procedures set forth on the
Company&#146;s third-party equity plan administrator&#146;s web site, within 90&nbsp;days of the Grant Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;</B><U><B>Electronic Delivery and Consent to Electronic Participation</B></U><B>. </B>The Company may, in
its sole discretion, decide to deliver any documents related to the Option grant under and
participation in the Plan or future options that may be granted under the Plan by electronic means.
Awardee hereby consents to receive such documents by electronic delivery and to participate in the
Plan through an on-line or electronic system established and maintained by the Company or another
third party designated by the Company, including the acceptance of option grants and the execution
of option agreements through electronic signature.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;</B><U><B>Notices</B></U><B>. </B>All notices, requests, consents and other communications required or
provided under this agreement to be delivered by Awardee to the Company will be in writing and will
be deemed sufficient if delivered by hand, facsimile, nationally recognized overnight courier, or
certified or registered mail, return receipt requested, postage prepaid, and will be effective upon
delivery to the Company at the address set forth below:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">DSW Inc.<BR>
810 DSW Drive<BR>
Columbus, Ohio 43219<BR>
Attention: EVP &#038; Chief Legal Officer<BR>
Facsimile: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All notices, requests, consents and other communications required or provided under this agreement
to be delivered by the Company to Awardee may be delivered by e-mail or in writing and will be
deemed sufficient if delivered by e-mail, hand, facsimile, nationally recognized overnight courier,
or certified or registered mail, return receipt requested, postage prepaid, and will be effective
upon delivery to the Awardee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;</B><U><B>Employment Agreement, Offer Letter or Other Arrangement</B></U><B>. </B>To the extent a written
employment agreement, offer letter or other arrangement (&#147;Employment Arrangement&#148;) that was
approved by the Compensation Committee or the Board of Directors or that was approved in writing by
an officer of the Company pursuant to delegated authority of the Compensation Committee provides
for greater benefits to Awardee with respect to (i)&nbsp;vesting of the Option on Termination of
Employment by reason of specified events or (ii)&nbsp;exercisability of the Option following Termination
of Employment, than provided in this agreement or in the plan, then the terms of such Employment
Arrangement with respect to vesting of the Option on Termination of Employment by reason of such
specified events or exercisability of the Option following Termination of Employment shall
supersede the terms hereof to the extent permitted by the terms of the plan under which the Option
was granted.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
</TR>
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    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">DSW INC.</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Its:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-bottom: 1px solid #000000">SVP, Human Resources</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>ACCEPTANCE OF AGREEMENT </U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Awardee hereby: (a)&nbsp;acknowledges receiving a copy of the Plan, which has either been previously
delivered or is provided with this agreement, and represents that he or she is familiar with and
understands all provisions of the Plan and this agreement; (b)&nbsp;voluntarily and knowingly accepts
this agreement and the Option granted to him or her under this agreement subject to all provisions
of the Plan and this agreement; and (c)&nbsp;represents that he or she understands that the acceptance
of this agreement through an on-line or electronic system, if applicable, carries the same legal
significance as if he or she manually signed the agreement. Awardee further acknowledges receiving
a copy of the Company&#146;s most recent annual report to shareholders and other communications
routinely distributed to the Company&#146;s shareholders and a copy of the Plan Description (Prospectus)
dated May&nbsp;21, 2009 pertaining to the Plan.<BR>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Awardee&#146;s Signature</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>l36650aexv31w1.htm
<DESCRIPTION>EX-31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-31.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Michael R. MacDonald, certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of DSW Inc.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f))for the registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter
(the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the
audit committee of the registrant&#146;s board of directors (or persons performing the equivalent
functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrant&#146;s ability to record, process, summarize and report financial
information; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial
reporting.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: June 4, 2009&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Michael R. MacDonald
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Michael R. MacDonald&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>l36650aexv31w2.htm
<DESCRIPTION>EX-31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-31.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATIONS</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Douglas J. Probst, certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this quarterly report on Form 10-Q of DSW Inc.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter
(the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant&#146;s
internal control over financial reporting; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the
audit committee of the registrant&#146;s board of directors (or persons performing the equivalent
functions):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrant&#146;s ability to record, process, summarize and report financial
information; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial
reporting.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: June 4, 2009&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Douglas J. Probst
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Douglas J. Probst &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD NOWRAP colspan="3" align="left">Executive Vice President and Chief Financial
Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>8
<FILENAME>l36650aexv32w1.htm
<DESCRIPTION>EX-32.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-32.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SECTION 1350 CERTIFICATION
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of DSW Inc. (the &#147;Company&#148;) on Form 10-Q for the
period ending May&nbsp;2, 2009, as filed with the Securities and Exchange Commission on the date hereof
(the &#147;Report&#148;), I, Michael R. MacDonald, President and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of
2002, that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">June 4, 2009&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Michael R. MacDonald
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Michael R. MacDonald &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed original of this written statement required by Section&nbsp;906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>9
<FILENAME>l36650aexv32w2.htm
<DESCRIPTION>EX-32.2
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-32.2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SECTION 1350 CERTIFICATION
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of DSW Inc. (the &#147;Company&#148;) on Form 10-Q for the
period ending May&nbsp;2, 2009, as filed with the Securities and Exchange Commission on the date hereof
(the &#147;Report&#148;), I, Douglas J. Probst, Executive Vice
President and Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of 2002, that:
</DIV>

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    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</TD>
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<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">June 4, 2009&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Douglas J. Probst
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Douglas J. Probst&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD NOWRAP colspan="3" align="left">Executive Vice President and Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed original of this written statement required by Section&nbsp;906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
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