Doug Probst – Chief Financial Officer Mike MacDonald – Chief Executive Officer Debbie Ferrée – Vice Chairperson and Chief Merchandising Officer

Chris Svezia – Susquehanna Financial Group Steve Marotta – C.L. King Claire Gallacher – Auriga Investments David Mann – Johnson Rice Scott Krasik – BB&T Capital Markets Jeff VanSinderen – B.Riley Jeff Black – Citi Mark Montagna – Avondale Partners Patrick McKeever – MKM Partners

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to today’s DSW Inc. Third Quarter Fiscal 2011 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, instructions will be provided at that time for you to queue up for questions. As a reminder, today’s conference is being recorded. And now, I would like to turn the conference over to Doug Probst, Chief Financial Officer. Please go ahead.

Thank you and good morning. Welcome to DSW’s third quarter earnings conference call. With me today in Columbus are Mike MacDonald, CEO; and Debbie Ferrée, Vice Chairperson and Chief Merchandising Officer. Please note that various remarks we make about the future expectations, plans and prospects of the company constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those listed in today’s press release and in our public filings with the SEC. Similar to the format of our presentation in our second quarter call, I’ll be commenting on our reported results for the third quarter and then Mike will provide his comments on our operating performance. Earlier this morning, we issued a press release detailing the results of operations for the quarter ended October 29, 2011. Our reported net income was $53.7 million and included $13.9 million in items related to our merger with Retail Ventures, Inc., which was completed on May 26, 2011, the settlement of the Premium Income Exchangeable Securities or PIES on September 15, 2011 and related items. You can find these items detailed in the condensed consolidated statements of operations and reconciliation of adjusted results attached to our press release issued this morning. Again, similar to our discussion in the second quarter, we thought it would be beneficial to walk you through the details of the costs and benefits associated with the merger and related items, and the specifics of where they are reflected on our P&L, so that you have a clear comparison of our operating performance to last year. The $13.9 million on RVI merger and related items in the third quarter breaks down into the following five components. First, $300,000 in costs included in SG&A, primarily related to RVI operating expenses. Second, $20.9 million in a non-cash benefit related to the change in fair value of derivative instrument. This reflects the change in fair value of the PIES from the beginning of the quarter to the settlement date and the change in the fair value of the warrants for the entire quarter. Although, this is a benefit for reported net income in accordance with GAAP, this item is excluded from net income for the reported diluted EPS calculation. Third, net interest expense of $1.5 million related to the interest on the PIES. Fourth, $300,000 in non-cash income tax expense due to the merger related tax items. And finally, a $5 million impairment charge related to a leased up office facility that DSW inherited in the merger with RVI. The tables in our press release outline these adjustments in more detail. Now that we have reviewed these items, the remainder of our discussion will refer to our adjusted results. As we have stated before, our guidance for fiscal 2011 has been based and will continue to be based on adjusted results excluding any impact from the merger with RVI and related items. On an adjusted basis, third quarter 2011 net income increased 12% to $39.8 million or $0.88 per diluted share, compared to net income of $35.5 million or $0.79 per diluted share in the third quarter of 2010. We are very pleased with our third quarter performance which continued the strong growth that we have achieved for the past nine quarters. Net sales were $530.7 million and comparable sales grew 5.2% on top of the 10.1% comp increase last year, which represents the two-year comp of 15%. By segments, our comps for our DSW business which includes dsw.com were up 5.2% and our comps for the leased business division were up 4.9%. Our total company merchandise margin rate was 46.4% for the third quarter and represented a 130-basis point improvement compared to last year. In addition to increasing private brand penetration, we were able to achieve this margin expansion by working with our vendors to mitigate costs, selectively passing on price increases and better markdown productivity. On a total company basis, we achieved occupancy leverage of 40 basis points for a 10.6% occupancy rate primarily due to the increased sales. This was slightly offset by 20 basis points deleverage in our distribution and fulfillment centers to support our size replenishment initiative in dsw.com business. Combined with the increase in merchandise margin, the net effect was a 150-basis point increase in gross profit margin. Our adjusted SG&A rate as a percentage of sales increase 40 basis points to 21.7% due to increased spend in our new stores and marketing. New store expenses were double what they were in the third quarter of 2010, as we continue to increase our footprint in new and existing markets. Marketing spend is higher than last year primarily due to a shift into the third quarter from the fourth quarter. This timing shift has been planned since the beginning of the year and is more consistent with our historical marketing spend. Strong sales growth combined with expansion in gross profit margin resulted in an 18.5% increase in adjusted operating profit to $65.2 million or 12.3% of net sales. Our adjusted tax rate for the third quarter which is based on a full year view was 39.3%. As we have said before, one of the benefits of the merger with RVI is that we have the ability to utilize the NOL assumed in the merger. This cash benefit which will be realized over the next two to three years was recognized for P&L purposes as a one-time item in Q2. Given this treatment, our ongoing effective tax rate for this quarter and future quarters is not impacted by this item. On November 2nd, SYMS Corp. which operated under SYMS and Filene’s Basement banners filed for bankruptcy protection and indicated that the company plans to close all stores. We currently have leased shoe departments in 27 Filene’s and SYMS stores. In the third quarter, we reserved $1.7 million for inventory related to Filene’s Basement and SYMS and we continue to diligently manage the effects of the pending bankruptcy. And as mentioned, adjusted EPS increased 11.4% to $0.88 per diluted share. Our balance sheet remains strong and we ended the quarter with cash and investments totaling $369 million. Inventory for DSW stores increased 5% on a cost per square foot basis. Capital expenditures for the quarter were $20.7 million reflecting eight new stores open, 17 store remodels and various business and IT projects. For the year, we continue to expect capital expenditures of nearly $80 million, which includes an investment in our fulfillment center to further support our growing dsw.com business, as well as one more new store which opened last week, one additional relocation and 12 additional remodels. Now turning to our guidance, as most of you are aware, we will continue to present our guidance on an adjusted basis excluding any impact and the merger with RVI and related items, as we believe this more accurately reflects the ongoing operations of the business. Based on our strong year-to-date performance, we are raising our annual adjusted diluted earnings per share guidance for fiscal 2011 to a range of $2.90 to $2.95 on $45.3 million shares. This is an increase to our previous range of $2.70 to $2.85. The mid-point of this range represents a 22% increase over our 2010 earnings of $2.40. We now expect comparable sales to increase between 7% and 8% for the year which implies a low single-digit comparable sales increase in the fourth quarter of 2011. I’d like to note that we achieved a 14.9% comparable sales increase in the fourth quarter of 2010, making this the most challenging comparison of the year. With that, I will turn the call over to Mike to highlight our third quarter performance in more detail.

Thanks, Doug, and good morning, everyone. I’m pleased to share with you another strong performance of DSW. Our third quarter included increased sales, expansion and merchandise margin, and leverage in occupancy, all of which contributed to a record earnings performance. Doug mentioned our comparable sales rose 5.2% in the quarter which we believe is pretty impressive because it follows two years of double-digit comp sales increases. Our comparable sales increase was driven by growth in traffic count with more modest gains in AUR and UPTs. We found that our customers are increasingly opting for DSW because of our fashion relevance. This combined with our expansive assortment of brands, everyday value and the ease of our assisted self-select service approach, drove increased sales across all categories and genders. Let me highlight our progress on some of our key initiatives. First, we continued to grow sales productivity, the key driver of profitability. On a trailing four-quarter basis, our sales per square foot now totals $240 and that compares to just $196 per square foot in fiscal 2008, representing a 22% increase. We continued to see opportunity to increase sales productivity further as we improve our assortments, enhance our precision marketing and further develop our supply chain initiatives. Second, we successfully drove increased store and online traffic through impactful national advertising and through precision direct mail and e-mail marketing that targeted our 18 million loyalty member base. As you have seen, we continued our Where’d You Get Those Shoes? TV campaign for the fall, with new vignettes and updated fashion looks. And the impact of our procession marketing is reflected in the fact that rewards members accounted for 88% of total sales in the quarter. Speaking of marketing, let me say a couple of things about our marketing efforts for the upcoming Thanksgiving weekend. First, we will have special offers, featured items and GWPs in both our stores and dotcom channels for Black Friday through Cyber Monday. Also, in support of our fast growing Gift Card business, we’ll kick off our annual gift card promotion on Black Friday and it will run through December 24th. However, we will not give the store away and we will not open up in the middle of the night. We’re pleased that our everyday discount pricing model enables us to predictably record the biggest day of the year on Black Friday without sacrificing margins or inconveniencing our customers and associates. Getting back to our initiatives. The third major area where we continue to make progress is the addition of product excitement and innovation in all categories of merchandise. This continuous injection of newness is helping us to evolve the DSW brand to fashion authority status for both footwear and accessories. And fourth, we continue to expand our private brand penetration. Year-to-date, our private brands have represented 10% of total sales, compared to 7% in the first nine months of 2010. This penetration increase was given -- was driven by growth in our existing brands and the addition of new brands. Turning to category performance from the DSW segment, our comp sales performance was positive for all major categories and included a strong double-digit comp performance in boots for both women and men. Our largest category, women’s footwear grew by 4.3% led by a positive response to our boots selections as our team did an excellent job in identifying trends and brands. We also experienced very strong growth in dress shoes especially pumps and anything with glitter, which should bode well for the holiday season when our customers are looking for festive dress shoes. Men’s which is our strategic growth area recorded a comp increase of 13.5%. Men’s boot sales actually outpaced women’s and I believe this reflects our growing ability to attract the more fashion-forward male customer. Athletic footwear had a 0.3% increase in the quarter with technical athletic footwear leading our performance. Excluding the toning category from both this year and last year, athletic grew by 13% over the prior year. In accessories which includes handbags, small leather goods, casual hosiery and fashion accessories, grew by 4.8%. The big driver of that increase continues to be casual hosiery, which includes tights, leggings, boot liners and other fashionable leg wear. For the quarter overall, sales growth was relatively balanced across all regions with comps ranging from plus 2% to plus 5%. The weakest performing region was the Northeast at plus 2%. As you recall, this part of the country was affected by Hurricane Irene in August and an early snowstorm in October. Regarding our store expansion, during the quarter we opened eight new stores. This included two stores in the smaller Alabama markets of Mobile and Montgomery. As you’ll recall, our strategy is to open full-size stores in smaller markets but still achieve good returns by sharpening our real estate and build-out costs. In just last week, we opened our 17th and final new store of the year in Lawrence, New York. We also made further progress on our aggressive program for remodels and clearance wall removals. To-date, we’ve completed 46 of the approximately 60 stores planned for the year. We’ve relocated two stores so far in 2011 with relocations being undertaken to either improve the quality of our location or to achieve lower store occupancy costs or both. Our e-commerce business remains strong in the third quarter. The three new initiatives we implemented earlier this year are complimenting the improved product assortment, leading to increased site traffic and higher conversion. We continue to make refinements to our Shoephoria stock locator system which as many of you are aware, allows our in-store customers to buy product from e-commerce when it’s not available in our stores. Sales generated by our Shoephoria system continue to grow and we believe this system is contributing to an overall positive customer service experience. Our second dsw.com initiative, our mobile website that we launched in June is driving traffic from smartphones and tablets as customers check their reward balances, research specific items and find stores in their area. Since the launch of mobile, we’ve seen a significant uptick in traffic and conversion has increased as well. The third initiative is the addition of kid’s shoes to our website offering at the beginning of the fall season. Kid’s represented 1.6% of dotcom volume. We expect this penetration to grow as we begin to market kid shoes and as we define this customer base. And finally, we are excited to announce by the end of the fourth quarter, we will have the capability to ship internationally from dsw.com. Our leased Business division had another good quarter posting a 4.9% comparable sales increase. This was our eighth consecutive quarter of positive comps in leased. Our merchandise offerings are helped to drive -- helping to drive sales across other areas of the host stores which further solidifies DSW as a valued business partner. Following quarter end, we were disappointed to learn of the pending closure of SYMS Corp. We remain confident that the strategies we have in place will lead to continued growth in the leased business and we’ll remain focus on adding partnership that capitalize on our unique operating platform in order to expand this business. As Doug mentioned, we completed the settlement of PIES on September 15th. In addition, our Board approved the company’s second quarterly dividend of $0.15 per share. We’re pleased to be able to continue to return value directly to our shareholders. Looking ahead to the remainder of the year, we remain confident in our ability to achieve the objectives we set for ourselves. DSW is well established as a destination for quality value priced footwear. We’re growing our brand awareness through our marketing efforts and we are increasing our productivity through solid execution in merchandising, inventory management and by virtue of our systems enhancement such as back locator and replenishment. These improvements in execution coupled with our well-developed loyalty program have us poised to continue to gain market share this holiday season. As our guidance suggests, we continue to believe it’s prudent to plan comparable sales to a modest increase. I know you’re well aware we’re facing our toughest comparisons from last year when comps rose 14.9% in the fourth quarter. However, given our flexible business model, we are well-positioned to chase upside opportunities as they present themselves. And, with that, I’ll turn the call back over to the operator to open the lines so we can take your questions.

Thank you. (Operator Instructions) We will take our first question from Chris Svezia with Susquehanna Financial Group. Chris Svezia – Susquehanna Financial Group: Hi everyone and a nice job on the quarter.

Good morning. Thanks. Chris Svezia – Susquehanna Financial Group: I guess, first just on the product margins, just some of your thoughts in and around that, I think initially, you probably expected it to be kind of flat in the back half, I mean, some opportunities of improvement, obviously, you did a great job here in the third quarter? Any thoughts about how we should think about fourth quarter or just a trajectory on the product margins, I mean, do you really think there are still greater opportunities to drive product margins in this business?

Well, maybe Deb probably has some comments here too, Chris, is that from the beginning of the year, we knew the cost pressures would gradually increase as we got into the fall season. So the cost pressures will be greater in the fourth quarter than they were in the third and the third was greater than second. But, well, we anticipated some of those but as we planned since the beginning of the year, the private brand, the other things that we’ve talked about to mitigate those pressures are there or helped to offset that and mitigate it, but the pressures will continue to increase through the fourth quarter and Debbie? Debbie Ferrée: Yeah. Good morning, Chris. We’re seeing the cost pressures continue to increase. We were able, as Doug pointed out to mitigate most of that in the third quarter. We are seeing in the low to mid single-digit cost increases in fourth quarter. Q1 orders that have been placed so far and certainly all of Q1 isn’t put to bed yet. Look like it continues to have an additional mid to -- mid single-digit cost increase as well. So now having said that, we still have a lot of work ahead of us similar to what we looked at third quarter like in working with our resources, balancing out our product brand against our domestic buys, there’s still a lot of work yet to be done to try to alleviate some of that pressure. But that’s the initial cost increases that we’re seeing right now. Chris Svezia – Susquehanna Financial Group: More specifically, what do you think in terms of the fourth quarter in terms of product margins? So expect to show an increase or is does that flatten out in the fourth quarter assumed in your guidance?

I would -- I’d say it wouldn’t be as strong as the third quarter and it’s baked into our guidance. Chris Svezia – Susquehanna Financial Group: Okay. Debbie, for you, I guess, any, I mean, boots did a great job, great to see the comp performance there. I mean, I guess whether any impact whatsoever you saw as the quarter unfolded or now, any thoughts to that? Debbie Ferrée: Well, certainly, there was a little bit of that in third quarter. I never liked to use that as an excuse though. So I’ll just say that I was really happy with our double-digit comp performance in boots and the same, Chris that we called out early, that we thought would do well in third quarter and it did and that was everything from riding boots, casual boots, engineer boots and anything that had shearling or fur. So those were the early indicators. Those trends are continuing into fourth quarter and now I kind of look forward to some of the real cold weather, the nasty weather heading, so that we sell our functional products. So there really wasn’t any surprises for me in third quarter in terms of how we did in boots and what fourth quarter is going to look like. Chris Svezia – Susquehanna Financial Group: And, Debbie, I’m just kind of surprised on the Athletics side, the -- on the Athletics side, the business was little bit softer and I thought, I’m just curious, just from a toning comparison, I mean, did they, ease significantly strong in the fourth quarter or did you take advantage, I think last year, there was a lot of that discounting going on, I guess, maybe you took advantage of that to sell some products, just kind of your thoughts, where you stand right now and I guess that comparison gets much easier in Q4, is that fair to say? Debbie Ferrée: Sure. So, Chris, let me just say that in third quarter last year, toning was approximately 12% of our business this year it was 2.7%. So it was a significant difference. What I’m really pleased about is that we were able to pick up volume over last year in third quarter in spite of the toning erosion that we projected. So we were able to offset all of that toning volume and add additional volume to that category. The comparisons get a little bit easier but I will tell you that we still have on that promotional opportunity -- that promotional business we were up against last year, if you remember third quarter, that’s when we started to accelerate things into rotation and take the markdown to kind of get ourselves cleaned from the toning and I’m really happy that we did that early last year because it nets for a better comparison for us this year and we’re not up against quite the pressures in toning that some other people are. So but I think that we are going to continue to be up against the numbers in the fourth quarter, after fourth quarter I think that’s pretty much behind us, but it looks like the strategies in place are enough to offset any of that promotional activity will be safe thing. Chris Svezia – Susquehanna Financial Group: Okay. Well, thank you very much and best of luck to you guys for the holiday.

Thanks.

Next we’ll hear from Steve Marotta with C.L. King. Steve Marotta – C.L. King: Good morning, everybody, and let me offer my congratulations as well. Doug, inventory was up 14% versus last year with sales up 8.5%. Can you pass out new stores and talk a little bit about your inventory position going into the fourth quarter?

Yeah. That’s why we breakout cost per square foot. Steve Marotta – C.L. King: Okay.

Which is a 5% increase and we’d like our inventory position and how we’re managing it to our targets for the beginning of Q1. So the balance of it is what you’ve talked about new stores, et cetera. So we like where we are. Steve Marotta – C.L. King: Great. I understand your normal reticent to talk about quarter trends to-date but that said has the Northeast accelerated from the up to that you realized in the third quarter?

Yeah. We’re going to continue to be reticent for responding to that it’s really early. But as Mike said in his script that the sales by region of the country weren’t that terribly different and obviously, there are probably a little more pressure in the Northeast in the third quarter because of that the weather item is going on, but they all tend to even out over the course of the third quarter and certainly a fall season. Steve Marotta – C.L. King: Right. And guys what I’m trying to drive out of it is I wouldn’t be surprised if that pendulum has swung a little bit given the weather break in the fourth quarter here in the Northeast.

That’s probably not on that. Steve Marotta – C.L. King: So you won’t?

Probably not a bad assumption but, yeah, we won’t comment on that. Steve Marotta – C.L. King: I understand. Lastly, so what you expect your year end cash to decrease?

Close to $400 million. That’s cash and investments of course. Steve Marotta – C.L. King: Correct. Thank you very much. Appreciate it.

Next we’ll hear from Claire Gallacher with Auriga Investments. Claire Gallacher – Auriga Investments: Great. Thank you. Good morning, everyone. Just a follow-up on the inventory question. Could you comment on your clearance inventory levels, where you’re at at the end of the quarter this year versus last year? Debbie Ferrée: Yeah. Good morning. This is Debbie. So our clearance inventory is actually in a fairly good position. Let’s just speak to the footwear clearance inventory. The penetration is equal to what it was last year at this same time. And we’re only up about 1.4% per average store in footwear clearance which is about 72 units per average store. So, I think we’re pretty comparable, pretty flat to last year. Claire Gallacher – Auriga Investments: And then, so for, you talked about a low single-digit comp for Q3 essentially. You came in a little bit ahead of that. Was there one, I mean, it looks men’s put up a really strong number. Is that where you saw the upside or was it from the women’s side as well? Where did you see the upside for the quarter? Debbie Ferrée: Well, the upside was in men’s obviously as our strategies, they are continued to roll out and take hold. But also in the boots area, we saw that really strong comps which was about -- it was double-digit comp increases. Claire Gallacher – Auriga Investments: Okay. Great. And then... Debbie Ferrée: And I’d just like to point out in the dress area, Mike had made mention about some things happening in dress. We were really pleased that two of our biggest and strongest categories continue to perform well for us and that is in the evening shoes where we -- we really think that there is a category domination there with all the assortment that we have, that across is a pretty broad lifestyle and also in the plain pumps that doesn’t seem to be letting up at all, which we talked about that on our last call. Claire Gallacher – Auriga Investments: Okay. Great. And then just lastly, you mentioned shipping internationally for e-commerce by the end of the year. Can you talk about the opportunity there just kind of where you see that business going?

Yeah. I don’t think we’re public on our expectations, I don’t think we actually know, we are going to open it up to about 200 countries, so I think we will get some reads there probably, build gradually over time and we’ll see where it goes. And I think we’ve been on record saying that’s where we want to judge the appetite for DSW internationally first, so we’re still on that track. Claire Gallacher – Auriga Investments: Okay. Great. Sounds good. Best of luck.

Thanks.

Next we’ll hear from David Mann with Johnson Rice. David Mann – Johnson Rice: Yeah. Thank you. Great job. A couple of questions. In terms of boots, can you elaborate on the percentage penetration Q3 versus Q4, remind us what that is? Debbie Ferrée: Yeah. Good morning, David. So, let me just say that Q3 as a percentage to our total fall boot expectations is 44% of the season, so Q3 represents 44% and Q4 represents 56%. So we have more volume in Q4 toward the back of the season than we have in the front end of the season. And once again, we are up against some pretty strong comps going into the fourth quarter but that’s how it breaks out. David Mann – Johnson Rice: And can you pass that out in terms of, sort of percentage of the mix or revenues in Q3, Q4? Debbie Ferrée: Let me... David Mann – Johnson Rice: Historically runs? Debbie Ferrée: Yeah. Let me get back to you on that.

I think it’s about 21 and maybe 24 something like that. 21, 24.5 something like that, between 3 and 4. David Mann – Johnson Rice: Okay. That’s very helpful. On the rewards program, it’s -- can you just go a little deeper into the kind of penetration you’re seeing, how fast that’s growing? Is that accelerating in terms of the acquisition of new rewards customers?

Yeah. I think we ended last year at a little under 17 million and we’re now at 18 million in terms of members and I think in terms of penetration of sales, I mentioned we were 88% then my recollection is it’s been around 86%, 87%, 88% for the last several quarters. David Mann – Johnson Rice: Okay.

So it’s maintaining its positioning and growing slightly. David Mann – Johnson Rice: On the dotcom business. Can you elaborate a little more on the pace of growth there and where do you stand in terms of that business relative to the profitability? If not specific, generally how much money is that losing, where is the – where do you -- how far away from a break point do you think you are?

Well, first of all that business has been contributing quite significantly to our total profitability for many quarters now. So I want to clarify that. David Mann – Johnson Rice: Okay.

And in terms of the pace of growth, we don’t break out that business specifically just because we believe there’s so much interplay between both the brick and mortar channel and the dotcom channel, and in fact that’s how we market it. We market the cross channel shopping to both customers segments. And so in particularly when you consider the implementation of our Shoephoria stock locator system earlier this year, we’re really facilitating that cross channel shopping. So that’s a long way of saying, we don’t break out dotcom sales, but I’d be -- it is easy for me to say, it continues to be the fastest growing segment of our business. David Mann – Johnson Rice: Okay. And then lastly on your -- what you try to do in terms of passing through price increases, can you just talk a little bit more about some, the elasticity there, where you’ve been able to pass through the price increases and what you were able to accomplish with that? Debbie Ferrée: Yeah. Hi David, it’s Debbie. I’ll tell you that the AUR in all areas of the business was up. So I think that the thing that’s most notable to talk about is specifically in the boot category where we saw the AUR up by a little less than 7% over last year and still driving double-digit comp increases. So I think what we really have to go back to is, what the strategy was in addressing these cost increases and how we are going to manage it. And that was number one, to try to maintain our sensitive pricing on our core items. Also on our key commodity core items, we wanted to kind of maintain those sensitive price points which I think we did a fairly good job on that. And then pass those cost increases on -- in places that were more cutting-edge fashion that had less price resistance due to the emotional bond of that products versus logical buying or rationale buying, I should say. So there isn’t any definitive pricing strategy we had across the entire mix. We looked at each individual item, looked at the kind of increases we were having to absorb here and looked at the kind of prices we thought the retails we could get to that product. So I think the strategy that we incorporated which was looking at each individual item and pricing each item based on what we thought we could get for it. That actually is the big story. And there is not one size fits all strategy across the entire business and how we manage those cost increases in those retail increases. David Mann – Johnson Rice: Thank you. Debbie Ferrée: You’re welcome.

Next we’ll hear from Scott Krasik with BB&T Capital Markets. Scott Krasik – BB&T Capital Markets: Yeah. Hi everyone. Congratulations. The -- just few questions, remind me Debbie, did you actually tap your cold weather boot sales last year the Sorel, if I remember it’s sort of to happen a little late and this would be incremental this year. How do you feel about the cold weather product? Debbie Ferrée: Could you repeat that question, Scott? There was a few different questions there I think. Scott Krasik – BB&T Capital Markets: I’m sorry. Just if I remember correctly, the real cold weather product, the Sorel, looked it hit a little later in Q4 or Q1 and you guys missed that last year. And then we’re going to be incremental this year. Debbie Ferrée: No. I don’t think so, Scott. I think we always deliver a little bit of that cold weather product at the end of Q3 which we did this year as well. So I don’t really see a big difference. I know we had a certainly large, although the volume is small, comp decreases in third quarter because the cold weather, the sloppy cold weather didn’t come as early as it did last year but -- now there is really not a big difference between Q4 this year and last year in terms of our cold weather boot expectations. Scott Krasik – BB&T Capital Markets: Okay. Private label sales at 10% now, where do you see that going and how is that split between bags, accessories and footwear? Debbie Ferrée: Yeah. So we continue to see opportunity for private brand. We believe that over the next three to five years that number could accelerate up to a penetration of close to 15% that’s where the trends suggest it could lead. So as far as the split between footwear and accessories we’re a lot more developed in accessories than we are in footwear right now. But that split is still primarily, mostly in footwear versus accessories. Scott Krasik – BB&T Capital Markets: Okay. And then to the extent, I don’t think you spoke about conversion in the stores was that about Mike and what sort of impact with the inventory management system is having and remind us to what you expect to get?

Yeah. Actually, our conversion in the stores was down slightly. And we believe that and of course I always think of conversion as being a parameter of the attractiveness of our assortment, the in-stack positioning, the value and the in-store experience. So it’s not any one thing it’s all of those things. And as you might imagine, given that we had a slight decline in conversion, we’re pretty focused on that and our stores are focused on that. One thing you should know is that as our Shoephoria sales increase and that is the customer coming in finding a star she likes but not the size going up to the check out area and having one of our associates find it online that sale which prior to this year may have resulted in a customer buying another style within the store that sale is now being captured by the Shoephoria system and the sale is credited to the dotcom business. So that’s an all new phenomenon this year and to the extent that happening and we’re transferring business that would have otherwise happened in the four walls of the store to the Shoephoria System, it would have a depressant impact on the conversion. Now, if you did the math and you said, every one of those sales that you did on Shoephoria is a sale that otherwise would have been transacted in the store, our conversion would have been about flat. I don’t think that’s true, I think there is true incremental sales being generated by Shoephoria and so, we would still be left with a small conversion decline. So, I can’t tell you whether it’s the customer being more selective or our in stock position, which I can’t imagine or one of those other factors, but we know it went down a little bit. Scott Krasik – BB&T Capital Markets: Okay. The traffic was up and I guess that leads to my next question. When you are loyal to customers that you signed up in the last year or two, are there any demographics, like geographic differences that you see that tells you that you’re pulling market share from other channels?

Yeah. I don’t have that data and we really classify our customers not by demographic, but based on the purchase behavior and that’s how we market to them. We call them clustermers, not clusters, not customers, but customer clusters or clustermers and so I can’t tell you where it’s coming from, I can just tell you how they behave, because that drives our marketing. Scott Krasik – BB&T Capital Markets: Okay. Well, keep up the good work. Thanks.

Thanks.

Next we will hear from Jeff VanSinderen with B.Riley. Jeff VanSinderen – B.Riley: Good morning, let me add my congratulations. Just to clarify was there anything out of the ordinary outside of the weather that I know you’ve mentioned about the sales progression on a monthly basis throughout the quarter and I guess more specifically, was there anything unusual in October?

As you know, Jeff and many of the people on the call know that we look at September and October together and we termed it September, there’s always oddities between those two months, but we find historically, that when you combine those two months, those nine weeks together the patterns are pretty stable and I would say that again for 2011. Jeff VanSinderen – B.Riley: Okay. Good to hear. And I know you briefly mentioned some of the things you’re doing for holiday promotions, loyalty customers and so forth, over all, if the plan for you to be more or less promotional versus last year in the programs you’re running?

I would say we will certainly not be more promotional, probably pretty comparable, maybe slightly less this coming weekend. Jeff VanSinderen – B.Riley: Okay. And then, as far as the most likely drivers of your same-store sales for holiday, AUR, UPT do you think that those are going to be similar to Q3? For Q4?

It’s hard for me to say.

Yeah. And there’s no one significant contributor, even the conversion drop was very slight, so all of those components, AUR, UPTs, conversion traffic, all of those will be probably slight contributors, but given a low single-digit comp, it will all be pretty close to flat would be my guess. Jeff VanSinderen – B.Riley: Got it. Okay. And then finally, any more color you can give us on the men’s business. I know that’s small, but it sounds like it’s running pretty strong, especially includes. Is there anything outside of boots to note and then is there any -- maybe you could just comment in sort of what you’re learning on the Men’s business? Debbie Ferrée: Yeah. This is Debbie. Good morning. I think that the core item replenishment, size replenishment, a piece of our business which is about a third of the business, that continues to be strong and that ensures that we don’t disappoint our core customers from finding their size and what I call those non-negotiable must have items, that continues to work well for us. Number two, the fact that we continue to add great fashion to the Men’s area and the men’s acceptance of buying some of these fashion items, I think really points to the fact that men are a little bit more comfortable with making those choices for themselves right now and not buying just the core classic items, really embracing some of the great new fashion at the Men’s market is showing us right now and I think those are really the two big things. And then we continue to add new products, elevate new products within the existing brands we have and add some other brands into our mix and the customer is really responding very nicely to it. So it’s to me is just the beginning of a nice trajectory in Men. Jeff VanSinderen – B.Riley: Okay. Great. Thanks very much and good luck for the quarter.

Thanks.

Next we’ll hear from Jeff Black with Citi. Jeff Black – Citi: Good morning, guys. Question on just the AUR given your comments around conversion and then what’s sort of level of comfort here that we have additional price increases. That sounds like in 4Q, that we can take price up a little bit more in 4Q if that’s the plan. And even more important in spring when we don’t have the fashion boot category, what’s our level of comfort we can continue to use the price lever there? Thanks. Debbie Ferrée: So we do have still continued headwinds in the pricing. What we’re finding right now is using the strategy that we have to maintaining prices on our core commodity items and taking these increases in the fashion items, is working for us right now. That’s the strategy that we will continue to implement, going forward. But I do want to continue to stress that we will continue to work on mitigating those cost increases that seem to be coming at us right now and trying to control those as best as we can. Right now our private brand increase has been able to kind of help us offset some of those cost increases and having more balanced AUR assortment out there, but there’s no question that we’re up against those headwinds. But I think that the strategies we’re implementing right now will continue to utilize through next year and hopefully they’ll hold out for us.

The other part of Jeff’s question was an implication that when we cross over into spring, our floor is suddenly devoid of fashion and therefore we don’t have pricing power on a chunk of our inventory and I think you’d want to say that’s just not true. Debbie Ferrée: No. We have fashion all the item. Yeah. Fashion is a core component of our assortment strategy and we are -- we’re never devoid of fashion. Jeff Black – Citi: Well, I guess the question was really, you don’t have the boot price points in spring. So higher prices on items that are lower priced in general might have more sensitivity that was the real question and then Doug, did you say...

Yeah. Jeff Black – Citi: How much marketing shifted into 3Q from 4Q? Thanks.

Yeah. Hey Jeff, the other thing you got to right -- is that although the price point in spring is lower than it is in fall because of the boot penetration. Boots take up about 1.5 to two times as much space on the floor as do sandals or regular footwear. So in terms of dollars per square foot it’s pretty flat. In terms of the marketing spend, the move, Doug, did you want to comment on that?

It’s about $3 million to $4 million. Jeff Black – Citi: All right guys, excellent color. Thanks and good luck, Bye.

Next we’ll hear from Mark Montagna with Avondale Partners. Mark Montagna – Avondale Partners: Hi. Thanks for taking my questions. Just to follow up on Shoephoria. If you were to credit all the sales of Shoephoria or the incremental sales of this year versus last year in Shoephoria, how might that have impacted the comps?

It wouldn’t have impacted the comps at all because well the dotcom sales and the store sales are in the comp calc. Mark Montagna – Avondale Partners: Okay, okay. And then just regarding clearance, I imagine it’s fairly low. Is it flat than last year or perhaps even lower than last year? Debbie Ferrée: In footwear, it’s pretty flat to last year so up just a little over 1%, about 72 units per average store. Mark Montagna – Avondale Partners: Okay. And then just looking at -- in the past, you’ve spoken about trying to grow the performance of athletic. I’m wondering how that’s going, what percentage of sales, what performance be versus more to fashion athletic? And if a really more targeted at Women for the performance athletic or also some Men? Debbie Ferrée: So it really is a brand and I will just tell you that the percentage and we really call that technical athletic which is the performance athletic piece. That is running around 25% of our total and that has continued to accelerate if you look at Q1, Q2 and Q3, it continues to accelerate in terms of penetration to total. So we’re really pleased with the performance there because that allows to get into some of the more technical, more fashionable and higher price goods of some of our core brands. So on that piece of our strategy is going very well. How much higher than 25% will we go, I don’t know. We’re kind of testing the waters right now, making sure that the customer is embracing all this new exciting product we’re throwing at her. She seems to be accepting it well and so I think that there could be more opportunity there but we’re happy with that 25% in total. Mark Montagna – Avondale Partners: Do you include lightweight running in that figure? Debbie Ferrée: Yeah. Lightweight running kind of crosses between that and some of the other lifestyles. So lightweight as a percent of total was about 15% of the total Athletic business. Mark Montagna – Avondale Partners: Okay. And then last year, in the fourth quarter, you had some expenses related to the distribution centers are you expecting – I’m assuming you’re not really expecting anything related to that again this year?

Well, we continue to increase into our DC and FC as the businesses grow and we support the initiatives that we have so it is actually a de-levering impact into our results in 2011 and into 2012. Mark Montagna – Avondale Partners: Okay. All right. Thank you.

Next we’ll hear from Patrick McKeever with MKM Partners. Patrick McKeever – MKM Partners: Thanks. Good morning, everyone. Wondering if you might elaborate a little bit on the comments about the international shipping and I think you said at the end of the fourth quarter, you’ll be in a position to do that. Are we talking about Canada and the U.K., other places, just I mean how might the logistics work there and what kind of an opportunity do you see to do business internationally through your e-commerce site? Thanks.

Yeah. We’re doing it through a third party called myusa.com or myus.com, I think. And I think the initial opening is going to represent about 200 countries including Canada and the U.K. And we really don’t know how big it’s going to be. I think it’ll be something that builds over time as the customer recognizes that we have that capability. So that’s as much detail as I can give you right now. Patrick McKeever – MKM Partners: Okay. And then any updated thoughts on the balance sheet and the -- all the cash and the no debt, now that you’ve completed the RVI merger and settle the PIES and paid the special cash dividend and initiated the quarterly dividend. It’s a lot of cash on the balance sheet any thoughts to potentially accelerating your store growth next year, possible acquisitions, those kinds of things for the cash. Thanks.

Well, you went through a nice list of the activity that we’ve done in the last six months or so. So thank you for crediting that. But first and foremost, it is do invested back into our business and if the real estate provides itself, a good real estate provides itself available to us, we will open more stores but we’re not prepared to tell you how many that would be but certainly, that would be an option for us. And the other items that you mentioned would be secondary to the investment back into DSW. Patrick McKeever – MKM Partners: Very good. Thanks so much.

We’ll take a follow up from Chris Svezia with Susquehanna Financial Group. Chris Svezia – Susquehanna Financial Group: Yeah. Thanks. Debbie, just a clarifying point earlier when we just chatted briefly about toning, you mentioned it was roughly 12% of the business, is that just athletics? Debbie Ferrée: Yeah. That was 12% of the Athletics business last year with toning, this year, 2.7. Chris Svezia – Susquehanna Financial Group: Okay. That’s what I wanted to make sure. And then would you expect -- and Athletics is not a critical driver in the fourth quarter, would you expect that business to improve sequentially in terms of the trend lines, just as you, like a few some of the toning pieces, or no? Debbie Ferrée: No. I think I’d plan it pretty flat with what we’ve seen in third quarter, Chris and like I said, we’re up against, from a volume perspective a little lighter toning volume in the fourth quarter than we were in third quarter, not by much, but a little bit lighter. So I think we have to cycle through fourth quarter and hopefully the strategies we have in place right now with technical and some of our other big brands, will hold against those toning numbers and I think they will through fourth quarter. Chris Svezia – Susquehanna Financial Group: And how’s the -- I know you’re building out with Nike on the men’s side, specifically, how is that been progressing for you guys? Debbie Ferrée: Very well, we have great partnership with that brand and the products that we’re getting in from them are doing very, very well. Chris Svezia – Susquehanna Financial Group: Okay. Debbie Ferrée: But (inaudible). Chris Svezia – Susquehanna Financial Group: Okay. And then, Mike for you, just size optimization, I guess that has no impact to you in the fourth quarter or did it and how would you characterize the opportunity for DSW? From, I guess a comp perspective, being in stock in certain sizes or from a margin perspective and that type of thing. I’m just trying to understand what that can do for you guys and when we expect to start seeing some benefits from that?

Okay. Well, first of all, size replenishment is the system capability we put in over a year ago and that we have gradually been ramping up the percentage of our inventory that is able to take advantage of that capability and I think we’re now at like 30%. And that’s fully penetrated at this point and I think what we said, is that the items that we put on size replenishment had about a 10% lift as we put those items on replenishment. And that’s happened gradually over the last, call it, year or year and a half. The second system is size optimization, which affects the proportion of styles that are allocated by size by store. In accordance with the natural demand patterns, any store location by size. And we’ve had no impact from that system yet because we haven’t put it in and I now believe we will not put that system in until probably the end of the first quarter of 2012, which is a little later than we may have signaled to you previously. But that’s a big system and it’s a big capability and it’s one that will both increases our sales and reduces our markdowns, simply because we’re going to more accurately allocate size by store. So hopefully that clarifies the two different systems and the timing of each. Chris Svezia – Susquehanna Financial Group: Understand. Okay. Thank you very much.

Next we’ll take a follow up from Scott Krasik with BB&T Capital Markets. Scott Krasik – BB&T Capital Markets: Thanks. Just you mentioned Debbie that you have been buying into Q1 already. Are you seeing some of the same trends for spring that you did last year, preppy and certainly the technical running? Are there new trends that you’re chasing at this point? How do you think about that? Debbie Ferrée: Yeah. As far as the Women’s business is concerned, I think it’s less about new styling that’s coming out than it is about new materials and new expressions that some of the existing styles we had. For example, wedges will continue to be strong but the way that wedges will be expressed both through material and this new infusion, its wonderful infusion of color that’s going to be coming in to the assortments, will make it seem really, really fresh to the customer. So it’s more about taking some key existing patterns and kind of reenergizing them with new materials and cover. So I’m really excited about that piece. Whenever color comes in to a season, it really does give the assortment a nice exciting kind of lift and gives the customer a reason to buy because color has not been a big trend in the business for many, many years. Naturals, which we talked about last year, that’s going to continue this year. Naturals, you’re going to see not only in color but in new materials as well. So to me there’s enough freshness going on there that I think it’ll give the customer reason to buy. And let’s not forget, booties for first quarter. And some of the new booties that you’re seeing right now in fourth quarter, that are kind of ankle grazing, the thicker chunkier heels are doing very well right now. And that just continued into Q1 as you start to see all of the new prints and the vintage and all the crochet dressing that’s going to be happening in Women’s, so I’m actually pretty excited that there’s things that we’ve got right now on the floor that really look could be there as strong and could be key items for us in first quarter next year. As far as athletic, you brought that up, Scott, I continue to see the ability for us to drive the technical piece, the lightweight piece through the infusion of new products that are coming to us from our core resources and I don’t think that that’s going to weaken at all, I think that just gets stronger. Scott Krasik – BB&T Capital Markets: Okay. That’s great. And then, just on the Kids business now that you approve back to school would that decrease as the percentage of the total penetration or you’re going to accelerate the branding now and try to grow that even on off peak?

Yeah. Scott, that would be a logical theory but we are still so early in doing it. We really do have our own history built with some kids’ experience you would suggest that they are or you would think that would drop off a little bit but we’ll learn. And it’s a very small part of our business so we got to keep our focus on it but we’re not going to let it drive our decision making too much. We’ll learn a lot about it in the first year and build our brand there. Scott Krasik – BB&T Capital Markets: Okay. Thanks, guys.

And that is all the time that we do have for questions today. At this time, I’d like to turn things back over to management for any additional or closing remarks.

Okay. Thanks very much. And thanks to all of you for your interest in DSW and your support in DSW. And we hope you have a great day. Thanks again. Debbie Ferrée: Thank you.

And that does conclude today’s teleconference. Thank you all for joining.