DSW Plans IPO

Columbus, Ohio, Retail Ventures wholly owned subsidiary DSW is going to break off on its own. The shoe retailer with 175 DSW Shoe Warehouse stores in 32 states will pursue an initial public offering in the first half of 2005. Lehman Brothers is acting as book-running manager of the offering with CIBC World Markets and Johnson Rice acting as co-managers.

After the IPO, Retail Ventures expects to own a majority of the outstanding common shares of DSW. In addition to DSW, Retail Ventures owns 114 Value City Department Stores, 26 Filene’s Basement Stores and 202 shoe supply locations for non-related retailers in the United States.

DSW will use a portion of the proceeds from the IPO to repay intercompany indebtedness owed to Retail Ventures. Retail Ventures will use these funds to pay down its $100 million term loan facility and a portion of its revolving credit facility, which it will refinance at the time of the IPO. With its improved financial position, Retail Ventures plans on improving the merchandise presentation at Value City Department Stores and reestablishing and freshening the stores’ consumer appeal.

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