On January 21, 2009, the Company announced expense and capital containment initiatives to proactively position itself for continued challenges in the retail environment. These initiatives, which include changes in compensation structure, rationalization of operating expenses, the closing of certain functions at its Fredericktown, MO distribution center, and other workforce reductions. On February 5, 2009, the Company provided an update on its expense reduction initiatives and announced that such initiatives are now expected to yield annual savings in the range of $28 million to $31 million. The workforce reduction program is expected to affect 12 to 14 percent of the Company's domestic workforce in business areas across the enterprise, excluding stores and distribution centers. Associate separations are beginning in February, with final dates of employment determined on an individual basis and driven by business need.

Costs related to these expense initiatives are currently anticipated to be in the range of $27 million to $30 million (of which approximately $5 million to $6 million will be non-cash), the majority of which will be incurred in the Company's fourth quarter of fiscal 2008, and the remainder will be completed by the end of fiscal 2009. The anticipated expenses by category are as follows:

Expense category                        Estimate of pre-tax expenses
People-related costs, including         $21.5 - $22.5 million
severance and other costs
Facility-related costs                  $4.5 - $6.0 million
Other                                   $1.0 - $1.5 million
Total                                   $27.0 - $30.0 million

Actual expenses could differ from these estimates.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This report contains certain forward-looking statements and expectations regarding the Company's future performance. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include, among other things, (i) the preliminary nature of estimates of the costs and benefits of the Company's expense and capital containment initiatives, which are subject to change as the Company makes decisions and refines these estimates over time; (ii) potential disruption to the Company's business and operations as it implements its workforce reduction initiatives; and (iii) the timing and uncertainty of activities and costs related to expense and capital containment initiatives, software implementation and business transformation. The Company's reports to the Securities and Exchange Commission contain detailed information relating to such factors, including, without limitation, the information under the caption "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K for the year ended February 2, 2008, which information is incorporated by reference herein and updated by the Company's Quarterly Reports on Form 10-Q. The Company does not undertake any obligation or plan to update these forward-looking statements, even though its situation may change.