The third-quarter numbers confirmed the challenges faced by thecompany's new management. Only about a month ago, Heywood Wilanskywas promoted to president and CEO of RVI from his previous positionas president and CEO of the Filene's Basement subsidiary. Hesucceeded John C. Rossler, who, along with EVP and COO Edwin J.Kozlowski, left the company. The COO position has not been filledas yet, though a search is under way. At the same time asWilansky's accession, the company also promoted new people to thepresidencies of all of its major subsidiaries: Deborah Ferree atDSW, Jerald Politzer at Value City, and Mark Shulman at Filene'sBasement.

"Current economic conditions are disproportionately hurting thelower-income families of our nation, and since this is a keyconsumer segment for Value City, the brand suffered along with itscustomers," said Milanski at Wednesday's earnings conference call."However, the challenges that face us, particularly in the ValueCity operations, aren't insurmountable."

He said that the Value City situation needs "a plan tounderstand where the brand stands today, and what strategic optionsare available to us," adding that he and Politzer are working onsuch a plan, and that they'll act swiftly to make whatever changesnecessary to strengthen Value City.