4.2%

-0.1%-1.2%

3.3%3.9%

-8.7%

5.0%

-5.2%

3.0%

4.8%

2.4%

-1.4% -1.8%

1.2%

4.8%

-16.2%

1.6%

-5.9%

5.3%

8.3%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

6-4 MonthsPrior to First

Increase

3 MonthsPrior to First

Increase

1 MonthPrior to First

Increase

1 MonthAfter FirstIncrease

3 MonthsAfter FirstIncrease

4-6 MonthsAfter FirstIncrease

7-9 MonthsAfter FirstIncrease

3 MonthsAfter LastIncrease

4-6 MonthsAfter LastIncrease

7-9 MonthsAfter LastIncrease

Retail Sector Average Equity Price Performance Relative to Broad Market Indices During FOMC Rate Tightening Periods, Since 1987*

Relative to S&P 500 Relative to Nasdaq Composite

Represents equal-weighted price performance of 40 retailers from 10 sub-industries, during the following periods:1) April 30, 1987 - May 17, 1989: +375 Bpts over 21 months2) Feb. 4, 1994 - Feb. 1, 1995: +300 Bpts over 12 months3) June 30, 1999 - May 16, 2000: +175 Bpts over 11 months4) June 30, 2004 - June 29, 2006: +425 Bpts over 27 months Sources: Federal Reserve Board, Bloomberg, Factset & Yahoo.

6-4 months prior to initial rate hike has been good time to start REDUCING

exposure to Retail Sector...

...However, history suggests short-term gains can be had from BUYING just before first rate increase; then SELLING a few months after

3 month period after last rate hike has been good time to BUY!

Retailers underperformed NASDAQ 4-6 months after initial rate hike during ALL four periods!

We are likely within this 6-4 month window prior to inital rate increase

Retail Sector Equity Price Performance Relative to Broad Market Indices During FOMC Rate Tightening Periods, Since 1987*

Relative Performance Prior to Tightening PeriodsDuration Basis Point

Four Tightening Periods (Months) Change Vs. S&P 500 Vs. Nasdaq Vs. S&P 500 Vs. Nasdaq Vs. S&P 500 Vs. Nasdaq1 April 30, 1987 - Feb. 24, 1989** 21 375 -8.82% -4.95% 1.93% 0.57% -5.37% -3.49%2 Feb. 4, 1994 - Feb. 1, 1995 12 300 14.09% 9.99% -4.80% -4.75% -2.83% -2.59%3 June 30, 1999 - May 16, 2000 11 175 6.54% -2.33% 4.67% 1.91% 3.55% 0.27%4 June 30, 2004 - June 29, 2006 27 425 4.87% 6.90% -2.05% -3.18% -0.20% -1.47%

Average Relative Performance 4.17% 2.40% -0.06% -1.36% -1.21% -1.82%

Relative Performance During Tightening PeriodsDuration Basis Point

Four Tightening Periods (Months) Change Vs. S&P 500 Vs. Nasdaq Vs. S&P 500 Vs. Nasdaq Vs. S&P 500 Vs. Nasdaq1 April 30, 1987 - Feb. 24, 1989** 21 375 3.23% 4.13% 9.93% 16.45% -18.63% -14.03%2 Feb. 4, 1994 - Feb. 1, 1995 12 300 10.72% 7.94% 9.75% 10.65% -6.15% -1.95%3 June 30, 1999 - May 16, 2000 11 175 -2.03% -9.57% -5.45% -14.24% -11.93% -44.76%4 June 30, 2004 - June 29, 2006 27 425 1.38% 2.22% 1.44% 6.51% 2.00% -3.97%

Average Relative Performance 3.33% 1.18% 3.92% 4.84% -8.68% -16.18%

Relative Performance After Tightening PeriodsDuration Basis Point

Four Tightening Periods (Months) Change Vs. S&P Vs. Nasdaq Vs. S&P Vs. Nasdaq Vs. S&P Vs. Nasdaq1 April 30, 1987 - Feb. 24, 1989** 21 375 4.99% 5.75% 2.65% 7.28% -2.70% -2.86%2 Feb. 4, 1994 - Feb. 1, 1995 12 300 -16.14% -17.81% 11.32% 2.38% -10.51% -11.10%3 June 30, 1999 - May 16, 2000 11 175 -9.92% -12.84% 1.97% 16.18% 28.77% 43.61%4 June 30, 2004 - June 29, 2006 27 425 0.25% 1.33% -4.00% -4.78% 3.49% 3.68%

Average Relative Performance -5.21% -5.89% 2.98% 5.27% 4.76% 8.33%

Relative Performance of Full Tightening PeriodsDuration Basis Point Average Average

Four Tightening Periods (Months) Change Vs. S&P 500 Vs. Nasdaq Length (Mths) Change (Bpts)1 April 30, 1987 - Feb. 24, 1989** 21 375 8.47% 12.32% 21 3752 Feb. 4, 1994 - Feb. 1, 1995 12 300 8.83% 11.39% 12 3003 June 30, 1999 - May 16, 2000 11 175 -18.09% -49.69% 11 1754 June 30, 2004 - June 29, 2006 27 425 4.78% 10.17% 27 425

Average Relative Performance 1.00% -3.95% 18 319

* Includes equal-weighted prices of 40 retailers in 10 sub-industries.

** Includes temporary reduction in target Fed Funds Rate immediately following "Black Monday" market correction on October 19, 1987.

Sources: Bloomberg, Factset, Federal Reserve Bank of New York

First Through Last Increase

Relative Performance After Last Rate Increase3 Months After Months 4-6 Months 7-9

Full Period** Average Tightening Period

1 Month After 3 Months After Months 4-6

Relative Performance Prior to First Rate Increase6-4 Months Prior 3 Months Prior 1 Month Prior

Relative Performance After Initial Rate Increase

0.75

1.50

2.25

3.00

3.75

4.50

5.25

6.00

6.75

7.50

8.25

9.00

9.75

10.50Jan-8

5

Jul-8

5

Jan-8

6

Jun-8

6

De

c-8

6

Jun-8

7

No

v-8

7

Ma

y-8

8

Sep-8

8

Feb

-89

Jun-8

9

No

v-8

9

Ma

y-9

0

No

v-9

0

Apr-

91

Oct-

91

Ma

r-9

2

Sep-9

2

Ma

r-9

3

Sep-9

3

Ma

r-9

4

Sep-9

4

Ma

r-9

5

Sep-9

5

Ma

r-9

6

Sep-9

6

Ma

r-9

7

Sep-9

7

Ma

r-9

8

Sep-9

8

Ma

r-9

9

Sep-9

9

Ma

r-0

0

Sep-0

0

Feb

-01

Aug-0

1

Feb

-02

Aug-0

2

Feb

-03

Aug-0

3

Feb

-04

Aug-0

4

Feb

-05

Aug-0

5

Feb

-06

Aug-0

6

Feb

-07

Aug-0

7

Fe

de

ral F

un

ds

Ta

rge

t R

ate

Periods of FOMC Monetary Policy Tightening, Since 1987

Recession July-1990 through March-1991

Recession March-2001 through November-2001

Sources: Federal Reserve Bank of New York, Bloomberg.

1) April 30, 1987 - May 17, 1989:Four Rate Increases, 375 Basis Points

2) Feb. 4, 1994 - Feb. 1, 1995:Seven Rate Increases, 300 Basis Points

3) June 30, 1999 - May 16, 2000:Six Rate Increases, 175 Basis Points

4) June 30, 2004 - June 29, 2006:16 Rate Increases, 425 Basis Points

October 19, 1987 BLACK MONDAY:22% daily market decline after 9% decline during prior week