UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the quarterly period ended May 1, 2004

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ___________ to ______________

                         Commission file number 1-10767
                                                -------

                              RETAIL VENTURES, INC.
                              ---------------------
             (Exact name of registrant as specified in its charter)

                Ohio                                   20-0090238
-------------------------------------   ----------------------------------------
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
    incorporation or organization)

 3241 Westerville Road, Columbus, Ohio                       43224
-------------------------------------------     --------------------------------
(Address of principal executive offices)                   (Zip Code)

                                 (614) 471-4722
               --------------------------------------------------
               Registrant's telephone number, including area code

                                 Not applicable
   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                     report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES [X] NO [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

The number of outstanding Common Shares, without par value, as of June 2, 2004
was 34,014,656.



                              RETAIL VENTURES, INC.
                                TABLE OF CONTENTS



                                                                                              PAGE NO.
                                                                                              --------
                                                                                           
PART I.   FINANCIAL INFORMATION

    Item 1.   Financial Statements

              Condensed Consolidated Balance Sheets at May 1, 2004
                  and January 31, 2004....................................................        3

              Condensed Consolidated Statements of Operations for the
                  three months ended May 1, 2004 and May 3, 2003..........................        4

              Condensed Consolidated Statements of Shareholders' Equity
                  at May 1, 2004 and January 31, 2004.....................................        5

              Condensed Consolidated Statements of Cash Flows
                  for the three months ended May 1, 2004 and May 3, 2003..................        6

              Notes to Condensed Consolidated Financial Statements........................        7

    Item 2.   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...............................................       14

    Item 3.   Quantitative and Qualitative Disclosures about Market Risk..................       24

    Item 4.   Controls and Procedures.....................................................       24

PART II.  OTHER INFORMATION

    Item 1.   Legal Proceedings...........................................................       25

    Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchases
                  of Equity Securities....................................................       25

    Item 3.   Defaults Upon Senior Securities.............................................       25

    Item 4.   Submission of Matters to a Vote of Security Holders.........................       25

    Item 5.   Other Information...........................................................       25

    Item 6.   Exhibits and Reports on Form 8-K............................................       25

Signature.................................................................................       26

Index to Exhibits.........................................................................       27

    Exhibit     31.1......................................................................       28
    Exhibit     31.2......................................................................       30
    Exhibit     32.1......................................................................       32
    Exhibit     32.2......................................................................       33


                                      -2-


                              RETAIL VENTURES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
                                   (UNAUDITED)



                                                              May 1,        January 31,
                                                               2004             2004
                                                           ------------     ------------
                                                                      
ASSETS
Cash and equivalents                                       $     13,679     $     14,226
Accounts receivable, net                                         10,078            8,969
Receivables from related parties                                  1,014              137
Inventories                                                     468,970          420,338
Prepaid expenses and other assets                                20,262           10,651
Deferred income taxes                                            50,146           44,933
                                                           ------------     ------------
Total current assets                                            564,149          499,254
                                                           ------------     ------------

Property and equipment, net                                     253,943          251,818

Goodwill                                                         37,619           37,619
Tradenames and other intangibles, net                            46,612           43,638
Other assets                                                     31,430           31,616
                                                           ------------     ------------
                                                           $    933,753     $    863,945
                                                           ------------     ------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                                           $    200,777     $    147,771
Accounts payable to related parties                                 933            3,335
Accrued expenses                                                113,815          112,550
Current maturities of long-term obligations                         672              741
                                                           ------------     ------------
Total current liabilities                                       316,197          264,397
                                                           ------------     ------------

Long-term obligations, net of current maturities
  Non-related                                                   169,582          154,724
  Related parties                                               172,722          172,216
Other noncurrent liabilities                                     59,864           55,841
Commitments and contingencies                                        --               --

Common shares, without par value;
  80,000,000 authorized; issued, including
  treasury shares, 34,014,707 and
  33,990,707 shares, respectively                               143,150          143,077
Warrants                                                          6,074            6,074
Retained earnings                                                72,774           74,321
Deferred compensation expense, net                                 (540)            (635)
Treasury shares, at cost, 7,551 shares                              (59)             (59)
Accumulated other comprehensive loss                             (6,011)          (6,011)
                                                           ------------     ------------
                                                                215,388          216,767
                                                           ------------     ------------
                                                           $    933,753     $    863,945
                                                           ------------     ------------


    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                      -3-


                              RETAIL VENTURES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)



                                                                Three months ended
                                                           -----------------------------
                                                              May 1,           May 3,
                                                               2004             2003
                                                           ------------     ------------
                                                                      
Net sales, excluding sales of licensed departments         $    646,300     $    588,532
Cost of sales                                                  (386,867)        (371,812)
                                                           ------------     ------------
Gross profit                                                    259,433          216,720

Selling, general and administrative expenses                   (255,259)        (231,041)
License fees and other income                                     1,557            1,501
                                                           ------------     ------------
Operating profit (loss)                                           5,731          (12,820)

Interest expense, net
   Non-related                                                   (2,149)          (3,651)
   Related parties                                               (6,191)          (5,932)
                                                           ------------     ------------
Loss before income taxes                                         (2,609)         (22,403)
Benefit for income taxes                                          1,062            9,230
                                                           ------------     ------------

Net loss                                                   $     (1,547)    $    (13,173)
                                                           ============     ============

Basic and diluted loss per share:
Net loss                                                   $      (0.05)    $      (0.39)
                                                           ------------     ------------

Shares used in per share calculations:
   Basic                                                         33,860           33,712
   Diluted                                                       33,860           33,712


   The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                      -4-


                              RETAIL VENTURES, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)
                                   (UNAUDITED)



                              Number of Shares
                              ----------------                                                             Accumulated
                                       Common                                     Deferred                    Other
                            Common    Shares      Common             Retained   Compensation   Treasury   Comprehensive
                            Shares  in Treasury   Shares   Warrants  Earnings      Expense      Shares         Loss         Total
                            ------  -----------  --------  --------  --------   ------------   --------   -------------   --------
                                                                                               
BALANCE, JANUARY 31, 2004   33,991       8       $143,077  $  6,074  $ 74,321   $       (635)  $    (59)  $      (6,011)  $216,767

Net loss                                                               (1,547)                                              (1,547)
Exercise of stock options       24                     73                                                                       73
Amortization of deferred
 compensation expense                                                                     95                                    95
                            ------     -----     --------  --------  --------   ------------   --------   -------------   --------
BALANCE, MAY 1, 2004        34,015       8       $143,150  $  6,074  $ 72,774   $       (540)  $    (59)  $      (6,011)  $215,388


    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                      -5-


                              RETAIL VENTURES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)



                                                                Three months ended
                                                           -----------------------------
                                                              May 1,           May 3,
                                                               2004             2003
                                                           ------------     ------------
                                                                      

Cash flows from operating activities:
Net loss                                                   $     (1,547)    $    (13,173)
Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
Amortization of discount on debt                                    506              497
Amortization of deferred compensation                                95               96
Depreciation and amortization                                    13,269           13,804
Deferred income taxes and other noncurrent liabilities           (4,507)          13,025
Loss on disposal of asset                                           727                7
Change in working capital, assets and liabilities:
     Receivables                                                 (1,986)         (13,804)
     Inventories                                                (48,632)         (63,067)
     Prepaid expenses and other assets                           (9,239)           3,866
     Accounts payable                                            50,604           48,221
     Accrued expenses                                             1,260          (27,576)
                                                           ------------     ------------
Net cash provided by (used in) operating activities                 550          (38,104)
                                                           ------------     ------------

Cash flows from investing activities:
Capital expenditures                                            (14,018)         (10,847)
Proceeds from sale of assets                                         17               13
Other assets and acquisitions                                    (4,034)              --
Proceeds from lease incentives                                    2,076            1,904
                                                           ------------     ------------
Net cash used in investing activities                           (15,959)          (8,930)
                                                           ------------     ------------

Cash flows from financing activities:
Principal payments of capital lease obligations
     and other debt                                                (211)            (201)
Net increase in revolving credit facility                        15,000           65,000
Proceeds from issuance of common shares                              73               --
                                                           ------------     ------------
Net cash provided by financing activities                        14,862           64,799
                                                           ------------     ------------

Net (decrease) increase in cash and equivalents                    (547)          17,765
Cash and equivalents, beginning of period                        14,226           11,059
                                                           ------------     ------------
Cash and equivalents, end of period                        $     13,679     $     28,824
                                                           ------------     ------------


    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                      -6-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    BUSINESS OPERATIONS

      Retail Ventures, Inc. and its wholly owned subsidiaries are herein
      referred to collectively as the Company. The Company operates three
      segments. Value City Department Stores ("Value City") and Filene's
      Basement, Inc. ("Filene's Basement") segments operate full-line, off-price
      department stores. The DSW Shoe Warehouse, Inc. ("DSW") segment sells
      better-branded off-price shoes and accessories. As of May 1, 2004, there
      is a total of 116 Value City Department Stores located principally in the
      Midwestern, Eastern and Southern states, 151 DSW stores located throughout
      the United States and 24 Filene's Basement stores located primarily in
      major metropolitan areas.

      On October 8, 2003, the Company reorganized its corporate structure into a
      holding company form whereby Retail Ventures, Inc., an Ohio corporation,
      became the successor issuer to Value City Department Stores, Inc. As a
      result of the reorganization, Value City Department Stores, Inc. became a
      wholly-owned subsidiary of Retail Ventures, Inc.

      In connection with the reorganization, holders of common shares of Value
      City became holders of an identical number of common shares of Retail
      Ventures, Inc. The reorganization was effected by a merger which was
      previously approved by the Company's shareholders. Since October 8, 2003,
      the Company's common shares have been listed for trading under the ticker
      symbol "RVI" on the New York Stock Exchange.

      VALUE CITY. We operate a chain of 116 off-price department stores located
      in the Midwestern, Eastern and Southern states, principally under the name
      Value City. For over 80 years, our strategy has been to provide
      exceptional value by offering a broad selection of brand name merchandise
      at prices substantially below conventional retail prices.

      DSW. We operate a chain of 151 DSW stores located throughout the
      United States. The DSW stores are upscale shoe stores offering a wide
      selection of branded dress and casual footwear below traditional retail
      prices. Additionally, Shonac Corporation, the parent company of DSW,
      pursuant to license agreements with Value City and Filene's Basement,
      operates licensed shoe departments in most Value City and Filene's
      Basement stores. Results of operations of the licensed shoe departments
      are included with the Value City and Filene's Basement segments. Shonac
      Corporation has also entered into agreements to supply merchandise to
      third parties' shoe departments. Results are included with the DSW segment
      and represent substantially all of the leased operations of the segment.

      FILENE'S BASEMENT. We operate 24 Filene's Basement stores located
      primarily in major metropolitan areas such as Boston, New York City,
      Atlanta, Chicago and Washington, D.C. Filene's Basement focuses on
      providing the top tier brand names at everyday low prices for men's and
      women's apparel, jewelry, shoes, accessories and home goods.

                                      -7-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

2.    BASIS OF PRESENTATION

      The accompanying financial statements reflect all adjustments consisting
      of only normal recurring adjustments, which are, in the opinion of
      management, necessary to present fairly the consolidated financial
      position and results of operations for the periods presented. To
      facilitate comparisons with the current year, certain previously reported
      balances have been reclassified to conform to the current period
      presentation.

3.    TRADENAMES AND OTHER INTANGIBLES

      The Company acquired during the three months ended May 1, 2004, the
      "Leslie Fay" tradename for approximately $4.0 million. The anticipated
      life of the amortizing asset has been initially assigned 15 years.

4.    PENSION BENEFIT PLANS

      The Company has three qualified defined benefit pension plans assumed at
      the time of acquisition of three separate companies. The Company's funding
      policy is to contribute annually the amount required to meet ERISA funding
      standards and to provide not only for benefits attributed to service to
      date but also for those anticipated to be earned in the future. The
      Company uses a January 31 measurement date for its plans.

      The components of net periodic benefit cost are comprised of the following
      (in thousands):



                                                                Three Months Ended
                                                           -----------------------------
                                                           May 1, 2004      May 3, 2003
                                                           ------------     ------------
                                                                      
Service cost                                               $         11     $          9
Interest cost                                                       350              323
Expected return on plan assets                                     (359)            (321)
Amortization of transition (asset) obligation                        (9)             (19)
Amortization of net loss                                            145              149
                                                           ------------     ------------
Net periodic benefit cost                                  $        138     $        141
                                                           ------------     ------------


      The Company's funding policy is to contribute an amount annually that
      satisfies the minimum funding requirements of ERISA and that is tax
      deductible under the Internal Revenue Code. The Company had anticipated
      contributing approximately $1.5 million in fiscal 2004 to meet minimum
      funding requirements but due to passing of recent legislation in April
      2004 the anticipated funding requirement will be approximately $0.9
      million in fiscal 2004.

5.    SHAREHOLDERS' EQUITY

      On September 26, 2002, the Company issued 2,954,792 warrants ("Warrants")
      to purchase common shares, at an initial exercise price of $4.50 per
      share, to Cerberus Partners, L.P., Schottenstein Stores Corporation and
      Back Bay Capital Funding LLC (the "Term Loan C Lenders"). The Warrants are
      exercisable at any time prior to June 11, 2012. The Company

                                      -8-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      has granted the Term Loan C Lenders registration rights with respect to
      the shares issuable upon exercise of the Warrants. The $6.1 million value
      ascribed to the Warrants was estimated as of the date of issuance using
      the Black-Scholes pricing model with the following assumptions: risk-free
      interest rate of 5.6%; expected life of 10 years; expected volatility of
      47%; illiquidity discount of 10%; and an expected dividend yield of 0%.
      The related debt discount is amortized into interest expense over the life
      of the debt.

      The number of shares issuable varies upon the occurrence of the following:
      (i) the issuance of additional common shares without consideration or for
      a consideration per share less than the Warrant exercise price; (ii) the
      declaration of any dividend; (iii) the combination or consolidation of the
      outstanding common shares into a lesser number of shares; (iv) the
      issuance or sale of additional shares at a price per share less than the
      current market price but greater than the Warrant exercise price; (v) the
      issuance of convertible securities which are convertible into common
      shares; and/or (vi) the exchange of shares in a merger or other business
      combination.

      $75 Million Senior Subordinated Convertible Loan - Related Parties

      The Company amended and restated its $75.0 million Senior Subordinated
      Convertible Loan Agreement on June 11, 2002 (the "Convertible Loan"). As
      amended, borrowings under the Convertible Loan will bear interest at 10%
      per annum. At the Company's option, interest may be paid-in-kind ("PIK"),
      from the closing date to the second anniversary thereof, and thereafter,
      at the option of the Company, up to 50% of the interest due may be PIK
      until maturity. PIK interest accrued with respect to the Convertible Loan
      is added to the outstanding principal balance, on a quarterly basis and is
      payable in cash upon the maturity of the debt. The Convertible Loan is
      guaranteed by all principal subsidiaries and is secured by a lien on
      assets junior to liens granted in favor of the lenders on the Revolving
      Credit Agreement and Term Loans. The Convertible Loan is not subject to
      prepayment until June 11, 2007. The agent has the right to designate two
      observers to the Board of Directors for so long as the agent is the
      beneficial owner of at least 50% of the advances initially made by it and
      has the right to designate two individuals to the Board of Directors for
      so long as the agent is the beneficial owner of at least 50% of the
      conversion shares issued or issuable upon conversion of the advances
      initially made by it.

      The Convertible Loan is convertible at the option of the holders into
      common shares of the Company and has a conversion price of $4.50. The
      maturity date is June 10, 2009.

6.    EARNINGS PER SHARE

      Basic earnings per share are based on the net loss and a simple weighted
      average of common shares outstanding. Diluted earnings per share reflects
      the potential dilution of common shares, related to both outstanding stock
      options and warrants, calculated using the treasury stock method and
      convertible debt calculated using the if-converted method. The numerator
      for the diluted earnings per share calculation is the net loss adjusted to
      remove the effect of

                                      -9-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      interest, adjusted for tax, on the convertible debt. For the three months
      ended May 1, 2004 and May 3, 2003 all potentially dilutive instruments:
      stock options, warrants and convertible debt, were anti-dilutive.

7.    VALUATION ACCOUNT

      Reserves established and used for severance costs are as follows (in
      thousands):



                                                        Twelve months
                                                           ended
                                                      ----------------
                                                      January 31, 2004
                                                      ----------------
                                                   
Balance at beginning of period                        $          3,996
Provisions to establish reserves                                    --
Reductions for intended purposes                                (3,996)
                                                      ----------------
Balance at end of period                                            --
                                                      ----------------


8.    ADOPTION OF ACCOUNTING STANDARDS

      The Financial Accounting Standards Board ("FASB") periodically issues
      Statements of Financial Accounting Standards ("SFAS"), some of which
      require implementation by a date falling within or after the close of the
      fiscal year.

      In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
      Variable Interest Entities" (FIN 46), which requires the consolidation of
      certain entities considered to be variable interest entities (VIEs). An
      entity is considered to be a VIE when it has equity investors who lack the
      characteristics of having a controlling financial interest, or its capital
      is insufficient to permit it to finance its activities without additional
      subordinated financial support. Consolidation of a VIE by an investor is
      required when it is determined that the investor will absorb a majority of
      the VIE's expected losses or residual returns if they occur. FIN 46
      provides certain exceptions to these rules, relating to qualifying special
      purpose entities (QSPE's) subject to the requirements of SFAS No. 140.
      Upon its original issuance, FIN 46 required that VIEs created after
      January 31, 2003 would be consolidated immediately, while VIEs created
      prior to February 1, 2003 were to be consolidated as of July 1, 2003.

      In October 2003, the FASB deferred the effective date for consolidation of
      VIEs created prior to February 1, 2003 to December 31, 2003 for calendar
      year-end companies, with earlier application encouraged.

      In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to
      clarify some of the provisions of the original interpretation and to
      exempt certain entities from its requirements. FIN 46R provides special
      effective date provisions to enterprises that fully or partially applied
      to FIN 46 prior to the issuance of the revised interpretation. In
      particular, entities that have already adopted FIN 46 are not required to
      adopt FIN 46R until the quarterly reporting period

                                      -10-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

      ended May 1, 2004. Adoption of the required sections of FIN 46, as
      modified and interpreted, including the provisions of FIN 46R, did not
      have any effect on the Company's consolidated financial statements or
      disclosures.

9.    ACCUMULATED OTHER COMPREHENSIVE LOSS

      Comprehensive loss represents net loss plus the results of certain
      non-shareholders' equity changes not reflected in the Consolidated
      Statement of Operations. The components of comprehensive loss, net of tax
      are as follows (in thousands):



                                                                Three months ended
                                                           -----------------------------
                                                           May 1, 2004      May 3, 2003
                                                           ------------     ------------
                                                                      
Net loss                                                   $     (1,547)    $    (13,173)
Net unrealized gain on
   derivative financial instruments
   net of income tax                                                 --              620
                                                           ------------     ------------
Other comprehensive loss                                   $     (1,547)    $    (12,553)
                                                           ------------     ------------


      The balance sheet caption accumulated other comprehensive loss of $6.0
      million at May 1, 2004 and January 31, 2004, respectively. Such loss
      relates to the minimum pension liability, net of income tax.

      The Company's interest rate swap expired during the three months ended May
      3, 2003 and was not renewed.

10.   STOCK BASED COMPENSATION

      The Company has various stock-based employee compensations plans. The
      Company accounts for those plans in accordance with APB No. 25.
      "Accounting For Stock Issued to Employees," and related Interpretations.
      No stock-based employee compensation cost is reflected in net loss, as no
      options granted under those plans had an exercise price less than the
      market value of the underlying common stock on the date of grant. The
      following table illustrates the effect on net loss and loss per share if
      the Company had applied the fair value recognition of SFAS 123,
      "Accounting for Stock-Based Compensation."

                                      -11-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



                                                                Three Months Ended
                                                           -----------------------------
                                                           May 1, 2004      May 3, 2003
                                                           ------------     ------------
                                                                      
Net loss, as reported                                      $     (1,547)    $    (13,173)
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method for
  all awards, net of tax                                           (651)          (1,029)
                                                           ------------     ------------
Pro forma net loss                                         $     (2,198)    $    (14,202)
                                                           ------------     ------------

Loss per share:
    Basic and diluted as reported                          $      (0.05)    $      (0.39)
    Basic and diluted pro forma                            $      (0.06)    $      (0.42)


11.   TAX VALUATION

      The Company establishes valuation allowances for deferred tax assets when
      the amount of expected future taxable income is not likely to support the
      use of the deduction or credit. For the three months ended May 1, 2004, no
      additional allowance has been provided. During the previous fiscal year
      ended January 31, 2004 an allowance of $1.5 million was provided for as
      the Company determined that there was a probability that future taxable
      income may not be sufficient to fully utilize deferred tax assets.

      The tax rate of 40.7% reflects the impact of the non-deductible warrant
      amortization included for book income but not tax.

12.   SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

      A supplemental schedule of non-cash investing and financing activities is
      presented below (in thousands):



                                                                Three months ended
                                                           -----------------------------
                                                              May 1,           May  3,
                                                               2004             2003
                                                           ------------     ------------
                                                                      
Cash paid during the period for:
    Interest
        Non-related                                        $      1,222     $      4,930
        Related parties                                           5,375            5,336

    Income taxes                                           $      5,523     $        556


                                      -12-


                              RETAIL VENTURES, INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

13.   SEGMENT REPORTING

      The Company is managed in three operating segments: Value City, DSW and
      Filene's Basement. All of the operations are located in the United States.
      The Company has identified such segments based on management
      responsibility and measures segment profit as operating (loss) profit,
      which is defined as income before interest expense and income taxes.

      Three-month period ended May 1, 2004 (in thousands):



                                                                         Filene's
                                        Value City         DSW           Basement         Total
                                       ------------    ------------    ------------    ------------
                                                                           
Net sales                              $    339,096    $    227,277    $     79,927    $    646,300
Operating (loss) profit                      (4,361)         12,990          (2,898)          5,731
Identifiable assets                         492,374         302,157         139,222         933,753
Capital expenditures                          4,114           5,558           4,346          14,018
Depreciation and amortization                 7,273           4,304           1,692          13,269


      Three-month period ended May 3, 2003 (in thousands):



                                                                         Filene's
                                        Value City         DSW           Basement         Total
                                       ------------    ------------    ------------    ------------
                                                                           
Net sales                              $    342,894    $    183,051    $     62,587    $    588,532
Operating (loss) profit                     (13,354)          2,601          (2,067)        (12,820)
Identifiable assets                         544,964         256,571         108,380         909,915
Capital expenditures                          4,026           6,193             628          10,847
Depreciation and amortization                 9,098           3,105           1,601          13,804


14.   COMMITMENTS AND CONTINGENCIES

      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 and 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 minimum estimated
      liability related to the claim. In the opinion of management, the amount
      of any liability with respect to these proceedings will not be material.
      As additional information becomes available, the Company assesses the
      potential liability related to its pending litigation and revises the
      estimates. Revisions in the Company's estimates and potential liability
      could materially impact its results of operations.

                                      -13-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

RISK FACTORS AND SAFE HARBOR STATEMENT

We caution that any forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) contained in this Report
and/or other risk factors that may be described in the Safe Harbor Statement and
Business Risks section of the Company's Annual Report on Form 10-K for the year
ended January 31, 2004, or contained in other filings with the Securities and
Exchange Commission or made by our management involve risks and uncertainties,
and are subject to change based on various important factors. The following
factors, among others, in some cases have affected the matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations. These same factors could cause our future financial performance in
fiscal 2004 and beyond to differ materially from those expressed or implied in
any such forward-looking statements. These factors include: decline in demand
for our merchandise, our ability to achieve our business plans, expected cash
flow from operations, vendor and their factor relations, flow of merchandise,
compliance with our credit agreements, our ability to strengthen our liquidity
and increase our credit availability, the availability of desirable store
locations on suitable terms, changes in consumer spending patterns, marketing
strategies, consumer preferences and overall economic conditions, the impact of
competition and pricing, changes in weather patterns, changes in existing or
potential duties, tariffs or quotas, paper and printing costs, the ability to
hire and train associates and development of management information systems.

Our operations have been historically seasonal, with a disproportionate amount
of sales and a majority of net income occurring in the back-to-school and
Christmas selling seasons for Value City and Filene's Basement. DSW seasonal
sales occur both in early Spring and Fall. As a result of seasonality, any
factors negatively affecting us during these periods, including adverse weather,
the timing and level of markdowns or unfavorable economic conditions, could have
a material adverse effect on our financial condition and results of operations
for the entire year.

CRITICAL ACCOUNTING POLICIES

Management's Discussion and Analysis discusses the results of operations and
financial condition as reflected in our consolidated financial statements, which
have been prepared in accordance with generally accepted accounting principles.
As discussed in Notes to Consolidated Financial Statements that are included in
our Annual Report on Form 10-K for the year ended January 31, 2004 that is filed
with the Securities and Exchange Commission, the preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of commitments and contingencies at the
date of the financial statements and reported amounts of revenues and expenses
during the reporting period. On an ongoing basis, management evaluates its
estimates and judgments, including, but not limited to, those related to
inventory valuation, depreciation, amortization, recoverability of long-lived
assets including intangible assets, the calculation of retirement benefits,
estimates for self insurance

                                      -14-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

reserves for health and welfare, workers' compensation and casualty insurance,
income taxes, contingencies, litigation and revenue recognition. Management
bases its estimates and judgments on its historical experience and other
relevant factors, 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.

While we believe that our historical experience and other factors considered
provide a meaningful basis for the accounting policies applied in the
preparation of the consolidated statements, we cannot guarantee that our
estimates and assumptions will be accurate. As the determination of these
estimates requires the exercise of judgment, actual results inevitably will
differ from those estimates, and such differences may be material to the
financial statements.

We believe the following represent the most critical estimates and assumptions,
among others, used in the preparation of our consolidated financial statements.
We have discussed the selection, application and disclosure of the critical
accounting policies with our audit committee.

      -     Revenue recognition. Revenues from our retail operations are
            recognized at the latter of point of sale or the delivery of goods
            to the customer. Retail revenues are reduced by a provision for
            anticipated returns based on historical trends.

      -     Cost of sales and merchandise inventories. We use the retail method
            of accounting for substantially all of our merchandise inventories.
            Merchandise inventories are stated at the lower of cost, 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 margins
            are calculated by applying a calculated cost to retail ratio to the
            retail value of inventories. The cost of the inventory reflected on
            our consolidated 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. Hence, earnings are negatively
            impacted as merchandise is marked down prior to sale. Reserves to
            value inventory at the lower of cost or market were $38.4 million on
            May 1, 2004 and $34.2 million at the end of fiscal 2003.

            Inherent in the calculation of inventories are certain significant
            management judgments and estimates including, setting the original
            merchandise retail value or markon, markups of initial prices
            established, reduction of pricing due to customer's value perception
            or perceived value known as 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 margins.

                                      -15-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

      -     Long-lived assets. In evaluating the fair value and future benefits
            of long-lived assets, we perform an analysis of the anticipated
            undiscounted future cash flows of the related long-lived asset and
            reduce the carrying value by the excess where the recorded value
            exceeds the fair value. Goodwill is tested on an annual basis using
            a fair value based approach.

            For the three months ended May 1, 2004 we recorded an impairment of
            $0.7 million related to the Value City segment for store assets. For
            the period ended May 3, 2003, we recorded no impairments related to
            long-lived assets.

            We believe at this time that the remaining long-lived assets'
            carrying values and useful lives continue to be appropriate. To the
            extent these future projections or our strategies change, the
            conclusion regarding impairment may differ from our current
            estimates.

      -     Self-insurance reserves. We record estimates for certain health and
            welfare, workers compensation and casualty insurance costs that are
            self-insured programs. These estimates are based on actuarial
            assumptions and are subject to change based on actual results.
            Should a greater amount of claims occur compared to what was
            estimated for costs of certain health and welfare, workers
            compensation and casualty insurance increase beyond what was
            anticipated, reserves recorded may not be sufficient and to the
            extent actual results vary from assumptions, earnings would be
            impacted.

      -     Pension. The obligations and related assets of defined benefit
            retirement plans are included in the Company's Annual Report on Form
            10-K Notes to Condensed Consolidated Financial Statements for the
            year ended January 31, 2004. Plan assets, which consist primarily of
            marketable equity and debt instruments, are valued using market
            quotations. Plan obligations and the annual pension expense are
            determined by independent actuaries and through the use of a number
            of assumptions. Key assumptions in measuring the plan obligations
            include the discount rate, the rate of salary increases and the
            estimated future return on plan assets. In determining the discount
            rate, we utilize the yield on fixed-income investments currently
            available with maturities corresponding to the anticipated timing of
            the benefit payments. Salary increase assumptions are based upon
            historical experience and anticipated future management actions.
            Asset returns are based upon the anticipated average rate of
            earnings expected on the invested funds of the plans. At May 1,
            2004, the actual assumption of our plans has remained unchanged from
            our Annual Report on Form 10-K for the year ended January 31, 2004
            filed with the Securities and Exchange Commission. To the extent
            actual results vary from assumptions, earnings would be impacted.

      -     Customer loyalty program. We maintain a customer loyalty program for
            our DSW operations in which customers receive a future discount on
            qualifying purchases. The "Reward Your Style" program is designed to
            promote customer

                                      -16-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

            awareness and loyalty plus provide the Company with the ability to
            communicate with our customers and enhance our understanding of
            their spending trends. Upon reaching the target level, customers may
            redeem these discounts on a future purchase. Generally, these future
            discounts must be redeemed within one year. We accrue the estimated
            costs of the anticipated redemptions of the discount earned at the
            time of the initial purchase and charge such costs to selling,
            general and administrative expense based on historical experience.
            The estimates of the costs associated with the loyalty program
            require us to make assumptions related to customer purchase levels
            and redemption rates. Accrued liability as of May 1, 2004 and
            January 31, 2004 was $3.0 million and $3.0 million, respectively. To
            the extent assumptions of purchases and redemption rates vary from
            actual results, earnings would be impacted.

      -     Income taxes. We do business in numerous jurisdictions that impose
            taxes. Management is required to determine the aggregate amount of
            income tax expense to accrue and the amount which will be currently
            payable based upon tax statutes of each jurisdiction. The estimation
            process involves adjusting income determined by the application of
            generally accepted accounting principles for items that are treated
            differently by the applicable taxing authorities. Deferred tax
            assets and liabilities are reflected on our balance sheet for
            temporary differences that will reverse in subsequent years. If
            different management judgments had been made, our tax expense,
            assets and liabilities could be different. During fiscal 2003, we
            established a reserve for deferred income tax assets of $1.5 million
            for carry forwards related to state and local net operating losses
            and for excess contribution carry forwards.

                                      -17-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
relationships to net sales of the listed items included in the Company's
Consolidated Statements of Operations.



                                                 Three months ended (1)
                                               --------------------------
                                               May 1, 2004    May 3, 2003
                                               -----------    -----------
                                                        
Net sales, excluding sales of
     licensed departments                         100.0%         100.0%
Cost of sales                                     (59.9)         (63.2)
                                                  -----          -----
Gross profit                                       40.1           36.8
Selling, general and administrative
     expenses                                     (39.5)         (39.3)
License fees and other income                       0.3            0.3
                                                  -----          -----
Operating profit (loss)                             0.9           (2.2)

Interest expense, net                              (1.3)          (1.6)
                                                  -----          -----
Loss before income taxes                           (0.4)          (3.8)
Benefit for income taxes                            0.2            1.6
                                                  -----          -----
Net loss                                           (0.2)%         (2.2)%
                                                  -----          -----


(1) Because of the seasonal nature of our retail business cycle, the results of
operations for the 13 weeks ended May 1, 2004 and May 3, 2003 (which do not
include the Christmas holiday season) are not necessarily indicative of such
results for the fiscal year.

THREE MONTHS ENDED MAY 1, 2004 COMPARED TO THREE MONTHS ENDED MAY 3, 2003

Net sales increased $57.8 million, or 9.8%, from $588.5 million to $646.3
million. Comparable store sales increased 4.2% and were by segment:



                                                     Three months ended
                                                 --------------------------
                                                 May 1, 2004    May 3, 2003
                                                 -----------    -----------
                                                          
Value City Department Stores                         (1.1)%         (4.0)%
DSW                                                  10.6%          (3.6)%
Filene's Basement                                    15.8%          (8.1)%
                                                     ----           ----
Total                                                 4.2%          (4.4)%
                                                     ----           ----


Value City comparable stores sales for the quarter were negative 1.1% due to a
weaker Easter selling season. DSW and Filene's Basement sales increased for the
same period above expectations due to early presentation of spring merchandise
and improved merchandise mix in the stores. Comparative sales for the segments
were compared against the prior year's weak retail environment and severe
weather conditions that existed in our market areas.

Value City's sales decreased $3.8 million to $339.1 million, a 1.1% decrease in
the quarter. The decrease in comparable sales is comprised of a decrease in
non-apparel hardlines of (0.8)%, a

                                      -18-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

decrease in apparel of (1.8)% and an increase of 0.9% in jewelry. The
merchandise categories of men's and ladies had decreases of (1.8%) and (4.9%),
respectively while children's increased 7.1%. Shoe sales in the Value City
segment were a positive 0.5% in the quarter.

DSW segment sales were $227.3 million a 24.2% increase in the quarter which
includes a net increase of 22 stores over the comparable period along with the
comparable store sales increase of 10.6%. The women's categories of dress,
casual and sandals and the accessories category had favorable results in the
period. During the quarter we had a net decrease of 10 leased shoe departments
due to store reductions under the supply agreement.

Filene's Basement sales increased 27.7% in the quarter to $79.9 million which
includes a net increase of 4 stores over the prior year's period and comparable
store sales increased 15.8%. Merchandise categories of men's, ladies and
children's had comparative increases of 15.5%, 10.3% and 37.4%, respectively,
while other categories of jewelry, shoes and home had increases of 9.6%, 22.9%
and 7.5%, respectively.

Gross profit, as a percentage of sales, increased to 40.1% compared to 36.8% for
the prior year. The increase in our overall margin rate is attributable to
higher initial markups in Value City, DSW and Filene's Basement operations. The
Value City segment improved average unit retail and initial retail markup to
obtain the gross margin increase. The improvement in comparative sales in DSW
and Filene's Basement segments reduced the need for promotional markdowns during
the period. Total gross profit increased $42.7 million to $259.4 million or
19.7%. Gross profit, as a percent of sales by segment in the first quarter, was:



                                          Three months ended
                                      --------------------------
                                      May 1, 2004    May 3, 2003
                                      -----------    -----------
                                               
Value City Department Stores             39.0%          36.6%
DSW                                      43.5%          38.6%
Filene's Basement                        35.4%          32.8%
                                         ----           ----
Total                                    40.1%          36.8%
                                         ----           ----


Selling, general and administrative expenses ("SG&A") increased $24.2 million
from $231.0 to $255.3 million. Approximately, $3.6 million is associated with
the pre-opening expenses for 9 new DSW stores and the 3 new Filene's Basement
stores since year end. Total SG&A expense associated with stores opened
subsequent to May 3, 2003 and through May 1, 2004 was $13.3 and represents
approximately 55% of the increase in SG&A expense. Other costs increasing from
the previous year include employee related health and welfare costs for medical
and retirement. As a percentage of sales SG&A was 39.5% compared to 39.3% in the
1st quarter of 2003. SG&A as a percent of sales by segment in the first quarter
were:

                                      -19-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



                                              Three months ended
                                          --------------------------
                                          May 1, 2004    May 3, 2003
                                          -----------    -----------
                                                   
Value City Department Stores                 40.6%          40.8%
DSW                                          37.8%          37.3%
Filene's Basement                            39.5%          36.7%
                                             ----           ----
Total                                        39.5%          39.3%
                                             ----           ----


License fees and other income were $1.6 million and $1.5 million for the
comparative periods. License fees and other income are comprised of fees from
licensees, layaway fees and vending income. These sources of income can vary
based on customer traffic and contractual arrangements.

Operating profit increased to a $5.7 million profit, from a loss of $12.8
million and increased as a percentage of sales from a loss of 2.2% to a profit
of 0.9%.

Net interest expense for the quarter decreased $1.2 million to $8.3 million. The
decrease is due primarily to a decrease in our weighted average borrowing rate
offset by an increase of $33.6 million in average borrowings from last year to
this year.

The effective tax rate for the three months ended May 1, 2004 was 40.7% as
compared to 41.2% for the three months ended May 3, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Our primary ongoing cash requirements are for seasonal and new store inventory
purchases, capital expenditures in connection with expansion, remodeling and
infrastructure growth, primarily information technology development. The primary
sources of funds for these liquidity needs are cash flow from operations and
credit facilities. Our working capital and inventory levels typically build
throughout the year and reach the highest level in the fall, peaking during the
holiday selling season.

Net working capital was $248.0 million and $242.5 million at May 1, 2004 and May
3, 2003, respectively. Current ratios at those dates were 1.8 for both periods.
Net cash provided by operations was $0.6 million in year-to-date fiscal 2004 as
compared to $38.1 million used in operations in year-to-date fiscal 2003.

Net cash used for capital expenditures was $14.0 million and $10.8 million for
the three months ended May 1, 2004 and May 3, 2003, respectively. During the
three months ended May 1, 2004, capital expenditures included $7.4 million for
new stores, $4.2 million for improvements in existing stores and $2.4 million
for information technology equipment upgrades and new systems. In addition to
the capital expenditures during the three month period, we acquired a tradename
for $4.0 million. A source of cash from investing activities is the proceeds
from lease incentives which are amortized as a reduction of rent expense over
the life of the lease.

On June 11, 2002, Value City Department Stores, Inc., together with certain
other principal subsidiaries of Retail Ventures, Inc., entered into a $525.0
million refinancing that consists of three

                                      -20-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

separate credit facilities (collectively, the "Credit Facilities"): (i) a
three-year $350.0 million revolving credit facility (the "Revolving Credit
Facility"), (ii) two $50.0 million term loan facilities provided equally by
Cerberus Partners, L.P. and Schottenstein Stores Corporation (the "Term Loans"),
and (iii) an amended and restated $75.0 million senior subordinated convertible
loan, initially entered into by us on March 15, 2000, which is held equally by
Cerberus Partners, L.P. and SSC (the "Convertible Loan"). These Credit
Facilities are guaranteed by Retail Ventures, Inc. and substantially all of its
subsidiaries.

We are not subject to any financial covenants under these credit facilities,
however, there are numerous restrictive covenants relating to our management and
operation. These non-financial covenants include, among other restrictions,
limitations on indebtedness, guarantees, mergers, acquisitions, fundamental
corporate changes, financial reporting requirements, budget approval,
disposition of assets, investments, loans and advances, liens, dividends, stock
purchases, transactions with affiliates, issuance of securities and the payment
of and modification to debt instruments. These Credit Facilities are also
subject to an Intercreditor Agreement, which provides for an established order
of payment of obligations from the proceeds of collateral upon default (the
"Intercreditor Agreement").

$350 Million Revolving Credit Facility

Under the Revolving Credit Facility, the borrowing base formula is structured in
a manner that allows us and our subsidiaries availability based on the value of
inventories and receivables. Primary security for the Revolving Credit Facility
is provided by a first priority lien on all of our inventory and accounts
receivable, as well as certain intercompany notes and payment intangibles.
Subject to the Intercreditor Agreement, the Revolving Credit Facility also has a
second priority perfected interest in all of the collateral securing the Term
Loans. Interest on borrowings is calculated at the bank's base rate or
Eurodollar rate plus 2.00% to 2.75%, depending upon the level of average excess
availability we maintain. The maturity date is June 11, 2005. At May 1, 2004 and
January 31, 2004, $161.1 million and $137.7 million were available under the
Revolving Credit Facility, respectively. Direct borrowings aggregated $140.0
million and $125.0 million at May 1, 2004 and at January 31, 2004, respectively,
while $13.9 million and $23.4 million letters of credit were issued and
outstanding at May 1, 2004 and January 31, 2004, respectively.

$100 Million Term Loans - Related Parties

The Term Loans are comprised of a $50.0 million Term Loan B and a $50.0 million
Term Loan C. All obligations under the Term Loans are senior debt and, subject
to the Intercreditor Agreement, have the same rights and privileges as the
Revolving Credit Facility and the Convertible Loan. We and our principal
subsidiaries are obligated on the facility. The maturity date is June 11, 2005.

The Term Loans' stated rate of interest per annum during the initial two years
is 14% if paid in cash and 15% if we elect a paid-in-kind ("PIK") option. During
the first two years of the Term Loans, we may pay all interest in PIK. During
the final year of the Term Loans, the stated rate of interest is 15.0% if paid
in cash or 15.5% if PIK and the PIK option is limited to 50% of the interest
due. At the three months ended May 1, 2004 and for the year ended January 31,
2004, we elected to pay interest in cash.

                                      -21-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

We issued 2,954,792 warrants ("Warrants") to purchase shares of common stock, at
an initial exercise price of $4.50 per share, to the Term Loan C Lenders. The
Warrants are exercisable at any time prior to June 11, 2012. We have granted the
Term Loan C Lenders registration rights with respect to the shares issuable upon
exercise of the Warrants. The $6.1 million value ascribed to the Warrants was
estimated as of the date of issuance using the Black-Scholes Pricing Model with
the following assumptions: risk-free interest rate of 5.6%; expected life of 10
years; expected volatility of 47%; illiquidity discount of 10%; and an expected
dividend yield of 0%. The related debt discount is amortized into interest
expense over the life of the debt.

The number of shares issuable varies upon the occurrence of the following: (i)
the issuance of additional shares of common stock without consideration or for a
consideration per share less than the Warrant exercise price; (ii) the
declaration of any dividend; (iii) the combination or consolidation of the
outstanding shares of common stock into a lesser number of shares; (iv) the
issuance or sale of additional shares at a price per share less than the current
market price but greater than the Warrant exercise price; (v) the issuance of
convertible securities which are convertible into shares of common stock; and/or
(vi) the exchange of shares in a merger or other business combination.

$75 Million Senior Subordinated Convertible Loan - Related Parties

We have amended and restated our $75.0 million Convertible Loan dated March 15,
2000. As amended, borrowings under the Convertible Loan bears interest at 10%
per annum. At our option, interest may be PIK during the first two years, and
thereafter, at our option, up to 50% of the interest due may be PIK until
maturity. PIK interest accrued with respect to the convertible loan is added to
the outstanding principal balance, on a quarterly basis, and is payable in cash
upon the maturity of the debt. The Convertible Loan is guaranteed by all
principal subsidiaries and is secured by a lien on assets junior to liens
granted in favor of the Revolving Credit Facility and Term Loans. The
Convertible Loan is not prepayable until June 11, 2007, and has a maturity date
of June 10, 2009. The agent has the right to designate two observers to our
Board of Directors for so long as the agent is the beneficial owner of at least
50% of the advances initially made by it and has the right to designate two
individuals to our Board of Directors for so long as the agent is the beneficial
owner of at least 50% of the conversion shares issued or issuable upon
conversion of the advances initially made by it.

The Convertible Loan is convertible at the option of the holders into shares of
our common stock at an initial conversion price of $4.50. The conversion price
is subject to adjustment upon the occurrence of specified events.

Achievement of expected cash flows from operations and compliance with the
restrictive covenants of our credit agreements (as discussed in the Notes to
Consolidated Financial Statements that are included in our 2003 Annual Report
Form 10-K filed with the Securities and Exchange Commission) are dependent upon
a number of factors, including the attainment of sales, gross profit, expense
levels, vendor relations, and flow of merchandise that are consistent with our
financial projections. Future limitations of credit availability by factor
organizations and/or vendors will restrict our ability to obtain merchandise and
services and may impair operating results. We believe that cash generated by
operations, along with the available proceeds from our credit

                                      -22-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

agreements and other sources of financing will be sufficient to meet our
obligations for working capital, capital expenditures, and debt service.
However, there is no assurance that we will be able to meet our projections.
Further, there is no assurance that extended financing will be available in the
future if we fail to meet our projections or on terms acceptable to us.

Contractual Obligations and Off-Balance Sheet Arrangements

We have made no material changes to our contractual obligations outside the
ordinary course of business.

ADOPTION OF ACCOUNTING STANDARDS

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" (FIN 46), which requires the consolidation of
certain entities considered to be variable interest entities (VIEs). An entity
is considered to be a VIE when it has equity investors who lack the
characteristics of having a controlling financial interest, or its capital is
insufficient to permit it to finance its activities without additional
subordinated financial support. Consolidation of a VIE by an investor is
required when it is determined that the investor will absorb a majority of the
VIE's expected losses or residual returns if they occur. FIN 46 provides certain
exceptions to these rules, relating to qualifying special purpose entities
(QSPE's) subject to the requirements of SFAS No. 140. Upon its original
issuance, FIN 46 required that VIEs created after January 31, 2003 would be
consolidated immediately, while VIEs created prior to February 1, 2003 were to
be consolidated as of July 1, 2003.

In October 2003, the FASB deferred the effective date for consolidation of VIEs
created prior to February 1, 2003 to December 31, 2003 for calendar year-end
companies, with earlier application encouraged.

In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to clarify
some of the provisions of the original interpretation and to exempt certain
entities from its requirements. FIN 46R provides special effective date
provisions to enterprises that fully or partially applied to FIN 46 prior to the
issuance of the revised interpretation. In particular, entities that have
already adopted FIN 46 are not required to adopt FIN 46R until the quarterly
reporting period ended May 1, 2004. Adoption of the required sections of FIN 46,
as modified and interpreted, including the provisions of FIN 46R, did not have
any effect on the Company's consolidated financial statements or disclosures.

INFLATION

The results of operations and financial condition are presented based upon
historical cost. While it is difficult to accurately measure the impact of
inflation because of the nature of the estimates required, management believes
that the effect of inflation, if any, on the results of operations and financial
condition has been minor; however, there can be no assurance that the business
will not be affected by inflation in the future.

                                      -23-


                              RETAIL VENTURES, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates, which may
adversely affect our financial position, results of operations and cash flows.
In seeking to minimize the risks from interest rate fluctuations, we manage
exposures through our regular operating and financing activities and, when
deemed appropriate, through the use of derivative financial instruments. We do
not use financial instruments for trading or other speculative purposes and are
not party to any leveraged financial instruments.

We are exposed to interest rate risk primarily through our borrowings under our
Revolving Credit Facility. At May 1, 2004, direct borrowings aggregated $140.0
million and an additional $13.9 million of letters of credit were outstanding
against the facility. The Revolving Credit Facility permits debt commitments up
to $350.0 million, matures on June 11, 2005 and generally bears interest at a
floating rate of LIBOR plus 2.0% to 2.75% based on the average excess
availability during the previous quarter.

A hypothetical 100 basis point increase in interest rates, net of taxes, would
have an approximate $0.4 million impact to our financial position, liquidity and
results of operation.

ITEM 4. CONTROLS AND PROCEDURES

The Company, under the supervision, and with the participation, of its
management, including its Chief Executive Officer and Chief Financial Officer,
performed an evaluation of the Company's disclosure controls and procedures, as
contemplated by Securities Exchange Act Rule 13a-15. Based on that evaluation,
the Company's Chief Executive Officer and Chief Financial Officer concluded, as
of the end of the period covered by this report, that such disclosures and
procedures were effective.

No change was made in the Company's internal control over financial reporting
during the Company's most recent fiscal quarter that has materially affected, or
is reasonable likely to affect, the Company's internal control over financial
reporting.

                                      -24-


PART II. OTHER INFORMATION

      Item 1.  LEGAL PROCEEDINGS. Not applicable

      Item 2.  CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF
               EQUITY SECURITIES. Not applicable

      Item 3.  DEFAULTS UPON SENIOR SECURITIES. Not applicable

      Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not
               applicable

      Item 5.  OTHER INFORMATION. Not applicable

      Item 6.  EXHIBITS AND REPORTS ON FORM 8-K.

               Part A  Index to Exhibits on page 27.

               Part B  Reports on Form 8-K.

                  A current report on Form 8-K, dated May 6, 2004, was filed
                  with the Securities and Exchange Commission on May 6, 2004
                  (Items 7 and 12).

                  A current report on Form 8-K, dated June 7, 2004, was filed
                  with the Securities and Exchange Commission on June 7, 2004
                  (Items 7 and 12).

                                      -25-


                                    SIGNATURE

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.

                                    RETAIL VENTURES, INC.
                                    (Registrant)
                                    ------------

Date: June 7, 2004                  By: /s/ James A. McGrady
                                        ----------------------------------------
                                        James A. McGrady,
                                        Executive Vice President, Chief
                                        Financial Officer, Treasurer and
                                        Secretary of Retail Ventures, Inc.

                                      -26-


                                INDEX TO EXHIBITS



Exhibit Number                    Description                                   Page No.
                                                                          
    31.1            Rule 13a-14(a)/15d-14(a)                                       28
                    Certification of Chief Executive Officer

    31.2            Rule 13a-14(a)/15d-14(a)                                       30
                    Certification of Chief Financial Officer

    32.1            Section 1350 Certification of                                  32
                    Chief Executive Officer

    32.2            Section 1350 Certification of
                    Chief Financial Officer                                        33


                                      -27-