about our company
Headquartered in Columbus, Ohio, Big Lots (NYSE: BLI) is a
Fortune 500 company with over 1,400 stores nationwide.
For more than three decades, we’ve delighted our customers
with a vibrant mix of exciting brands, unique products, and
closeout prices. Big Lots offers new merchandise every week
at substantial savings over traditional discount retailers,
on average 20 to 40 percent less. Our customers love our
unexpected, once-in-a-lifetime deals. We also carry attractive,
affordable furniture, home furnishings, seasonal merchandise,
and hundreds of everyday items consumers want and need.
Through excellent relationships with manufacturers, high-volume
purchases, and strict expense control, we pass tremendous
savings on to our customers.
ﬁnancial highlights (UNAUDITED ADJUSTED RESULTS)
2005 2004 2003 2002 2001
($ in thousands, except per share amounts and sales per selling square foot)
EARNINGS DATA (a)
Net sales $ 3,248,622
$ 4,429,905 $ 3,942,653 $ 3,647,771
Net sales increase (b) NR
6.8% 8.1% 12.3%
Income from continuing operations (c) $ 26,614
$ 15,725 $ 81,073 $ 68,281
Income from continuing operations increase (decrease) (b) (c) NR
(50.0)% 18.7% 156.6%
Income from continuing operations per share - diluted (c) $ 0.23
$ 0.14 $ 0.68 $ 0.59
Income from continuing operations per share - diluted increase
(decrease) (b) (c) NR
(48.1)% 15.3% 156.5%
Average diluted common shares outstanding 113,660
113,677 117,253 116,707
Gross margin - % of net sales (c) 40.8%
39.1% 41.9% 42.2%
Selling and administrative expenses - % of net sales (c) 36.8%
36.0% 36.0% 36.3%
Depreciation expense - % of net sales (c) 2.1%
2.5% 2.3% 2.2%
Operating proﬁt - % of net sales (c) 1.9%
0.6% 3.6% 3.6%
Net interest expense - % of net sales 0.6%
0.1% 0.4% 0.6%
Income from continuing operations - % of net sales (c) 0.4% 2.1% 1.9% 0.8%
BALANCE SHEET DATA AND FINANCIAL RATIOS
Cash equivalents and short-term investments $ – $ 170,300 $ 143,815 $ 17,500
Inventories 836,092 829,569 776,210 705,293
Property and equipment - net 584,083 621,998 548,103 527,011
Total assets 1,625,497 1,800,543 1,655,571 1,470,281
Long-term obligations 5,500 204,000 204,000 204,000
Shareholders’ equity 1,078,724 1,108,779 1,020,088 922,533
Working capital 557,231 718,620 654,626 555,719
Net debt (d) $ 5,500 $ 33,700 $ 60,185 $ 186,500
Current ratio 2.3 2.7 2.7 2.8
Inventory turnover (e) 3.0 3.0 2.9 2.7
Long-term obligations to total capitalization 0.5% 15.5% 16.7% 18.1%
Return on assets - continuing operations (a) (c) 0.9% 4.7% 4.4% 1.8%
Return on shareholders’ equity - continuing operations (a) (c) 1.5% 2.9%
2.9% 7.6% 7.0%
CASH FLOW DATA
Depreciation and amortization $ 69,935
$ 114,617 $ 92,407 $ 85,840
Capital expenditures $ 113,387
$ 170,175 $ 110,110
Stores open at end of the ﬁscal year 1,335
1,401 1,502 1,430 1,380
Gross square footage (000’s) 35,528
41,413 42,975 40,040 37,882
Selling square footage (000’s) 26,020
29,856 30,943 29,019 27,593
Increase (decrease) in selling square footage 5.6%
(3.5)% 6.6% 5.2% 6.0%
Average selling square footage per store 19,491
21,310 20,601 20,293 19,995
OTHER SALES DATA
Comparable store sales growth 2.0%
1.8% 0.0% 3.4% 7.7%
Average sales per store (f) $ 2,582
$ 3,028 $ 2,951 $ 2,932 $ 2,809
Sales per selling square foot (f) $ 134
$ 146 $ 144 $ 146 $ 142
4,500 1,500 3.5
$3,943 1,335 3.0 3.0
3,600 1,200 2.8
2,700 900 2.1
1,800 600 1.4
900 300 .7
0 0 .0
01 02 03 04 05 01 02 03 04 05 01 02 03 04 05
number of stores inventory turnover (adjusted results (e))
net sales (a) $ in millions
(a) Earnings data and related ﬁnancial ratios have been adjusted to reﬂect the reclassiﬁcation of 130 closed stores to discontinued operations for all periods presented. For information relating to the 130 closed stores,
refer to the Discontinued Operations Note to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for ﬁscal year 2005.
(b) Comparable metrics to ﬁscal year 2000 are not reported (“NR”) because the Company did not report the results of ﬁscal year 2000 with the results of the 130 closed stores reported in discontinued operations.
(c) This item is shown excluding the impact of charges for ﬁscal years 2003 and 2001. A reconciliation of the differences between GAAP and the non-GAAP ﬁnancial measures presented in this table for ﬁscal years
2003 and 2001 is shown on the following page.
(d) Net debt is calculated as long-term obligations less cash equivalents and short-term investments.
(e) Inventory turnover includes the results of the 130 closed stores reported in discontinued operations for all periods presented and excludes the impact of the ﬁscal year 2001 charge described on the following page.
(f) Excludes wholesale business for periods presented, and includes the 130 closed stores reported in discontinued operations for all periods presented.
The Unaudited Adjusted Results, which include ﬁnancial measures that are not calculated in accordance with accounting principles
generally accepted in the United States of America (“GAAP”), are presented in order to improve comparability of ﬁnancial information
for periods presented. The following information and reconciliation exclude charges related to ﬁscal years 2003 and 2001, as
Fiscal Year 2003 Fiscal Year 2001
Reported Adjustments Adjusted Results Reported Adjustments Adjusted Results
(GAAP) (non-GAAP) (GAAP) (non-GAAP)
($ in thousands, except per share amounts)
Net sales 100.0 %
$ 3,942,653 $ 3,942,653
Cost of sales 58.1
Gross margin 41.9
Selling and administrative expenses 36.8
Depreciation expense 2.1
Operating proﬁt (loss) 1.9
Interest expense 0.6
Interest income (0.0)
Income (loss) from continuing operations
before income taxes 1.3
Income tax expense (beneﬁt) 0.5
Income (loss) from continuing operations 0.8
Income (loss) from discontinued operations 0.1
Net income (loss) 0.9 %
$ 80,220 $ 85,102
Income (loss) per common share - basic:
Continuing operations $ 0.24
$ 0.74 $ 0.70
Discontinued operations 0.03
$ 0.69 $ 0.73
Income (loss) per common share - diluted:
Continuing operations $ 0.23
$ 0.73 $ 0.68
Discontinued operations 0.03
$ 0.68 $ 0.72
For a discussion of deﬁned terms, refer to the Company’s Annual Report on Form 10-K for ﬁscal year 2005 (“2005 Form 10-K”).
The 2005 Form 10-K is included in this Annual Report to Shareholders.
FISCAL YEAR 2003 CHARGE
In ﬁscal year 2003, the Company recorded charges related to KB Toys matters and litigation of $4.9 million (net of tax), or $0.04 per
diluted share. The KB Toys charge resulted primarily from KB’s bankruptcy ﬁling on January 14, 2004, and represented: a) a $14.3
million (net of tax) charge related to KB store lease guarantee obligations; b) a $10.6 million (net of tax) beneﬁt related to the partial
charge-off of the HCC Note and the write-off of the KB warrant; and c) a $5.8 million (net of tax) beneﬁt related to the resolution and
closure of KB state and local tax matters. In another KB matter unrelated to the bankruptcy proceedings, a litigation charge of $1.2
million (net of tax) was recorded relating to certain advertising practices of KB Toys. Unrelated to KB Toys, the Company also recorded
a $5.7 million (net of tax) charge to settle the Company’s two California class action lawsuits relating to the calculation of earned
overtime wages for certain former and current store managers and assistant store managers in that state.
FISCAL YEAR 2001 CHARGE
In ﬁscal year 2001, the Company recorded a charge of $50.4 million (net of tax), or $0.44 per diluted share. The charge
represented: a) costs to modify the Company’s product assortment and exit certain merchandise categories ($6.1 million net of tax);
b) adjustments to the estimated capitalized freight costs related to inbound imported inventories in response to better systems and
information ($15.0 million net of tax); c) adjustments to inventory-related costs that were identiﬁed as a result of the completion of
a signiﬁcant multiyear conversion to a detailed stock-keeping unit inventory management system ($16.7 million net of tax); and d)
changes in estimates and estimating methodology related to insurance reserves ($12.6 million net of tax).
The Unaudited Adjusted Results should not be construed as an alternative to the reported results determined in accordance with
GAAP. Further, the Company’s deﬁnition of adjusted income information may differ from similarly titled measures used by other
companies. While it is not possible to predict future results, management believes the adjusted non-GAAP information is useful for the
assessment of the Company’s ongoing operations. The Unaudited Adjusted Results should be read in conjunction with the Company’s
Consolidated Financial Statements and Notes contained in the 2005 Form 10-K.
Let me begin by expressing how proud I am to be the new CEO of Big Lots. I
joined the company in July 2005. During my ﬁrst few weeks on the job, I spent a
great deal of time learning and listening — not unusual activities for a new CEO.
I also talked with hundreds of associates, company leaders, and customers during
planning sessions and store visits.
What’s been clear to me from the beginning is that we have talented people and a
strong niche in the retail marketplace. At the same time, we also have an incredible
opportunity to transform Big Lots from a good company to a truly great one.
We deliberately set out looking at our business in new ways, challenging our
assumptions about how we operate and what our customers expect. As I often
STEVEN S. FISHMAN
remind our associates, retail constantly changes, and that’s the fun part about
Chairman, Chief Executive Ofﬁcer, President
this business. We always have to challenge ourselves to make changes in order to
improve our results and drive shareholder value. And a new CEO — especially an optimistic one — can embrace
change with an open mind.
In August we launched a new strategy called WIN, or What’s Important Now. WIN involves tactical plans to
improve the ﬁnancial performance of the business in the short and long term. Throughout 2005, development
of the WIN strategy focused the leaders of the business on three key areas: operating expenses, real estate,
The strategy involves three steps: Discovery, Testing, and Execution. We went through Discovery during my ﬁrst six
months. As a result of what we learned, we began doing some things differently. The following provides an overview
of our actions involving our expense structure, real estate, and merchandising.
Our overhead costs in relation to our sales were simply too high. It was critical for the future success of the business
that we quickly reduce our cost structure. We began taking action in October and have already identiﬁed annual
expense reductions of $30 to $35 million. We’ve cut millions of dollars from our budget in corporate overhead
expenses. We reorganized our ﬁeld operations structure, realigned positions to eliminate management redundancies,
and are reducing the number of tasks and related payroll we are spending in our stores.
Like every retailer, we constantly review the performance of our stores. Historically, we have closed or relocated
approximately 30 to 40 stores per year. However, as part of our WIN strategy and in light of softening sales trends
in 2004 and early 2005, we decided to perform a detailed review of every store in our ﬂeet. As a result of our
analysis, we accelerated the closing of an additional 85 closeout stores, bringing our total number of
closeout store closings to 131 for the year. This was a very proactive move to improve the long-term
ﬁtness of our business without compromising our solid cash position. In addition to closing the
131 closeout stores, we made a decision to exit the stand-alone furniture business. While I
love the furniture business, I do not have the same affection for the stand-alone furniture
stores. We have a greater opportunity to improve sales in furniture departments
within our closeout stores while reducing the operating expenses and the inventory
committed to operating a stand-alone furniture business. In total, we closed 174
stores during 2005, which will improve our proﬁtability in 2006 and beyond.
New store openings for the company have historically been very
opportunistic, spreading across all parts of the country. Starting with
2006, we will implement a more market-speciﬁc strategy, opening stores
selectively and tailoring the expense structure to match the market
potential. As a result, new store growth will be minimal as we focus on
our prime obsession: boosting sales and proﬁts at existing stores.
One of the greatest challenges we have before us is to deﬁne and reﬁne our merchandising strategy. I admit that
merchandising has been my passion for many years. I started out as a merchant, and I often accompany our buyers
on trips to market and at trade shows. Our business plan for 2006 begins with the same objective we start with
every year — providing our customers with incredible brand-name deals at prices nobody can beat. Simultaneously,
we will work hard to grow our proﬁt margins by focusing on opportunities to improve our assortment, sales,
productivity, and marketing.
The process to reﬁne our merchandising strategy began with extensive research. During our Discovery phase, we
studied current successes, received input from store managers and company leaders, and interviewed over 20,000
Big Lots customers.
We learned that Big Lots appeals to an extremely wide range of cost-conscious consumers. The majority of those
surveyed have household incomes between $25,000 and $75,000, are married, and have children. About a third
of them shop us at least once a month. But no matter their age, race, or income level, they all have one thing in
common: They’re treasure hunters.
To our customers, Big Lots represents a unique opportunity to indulge their inner treasure hunter. It doesn’t matter
if they’re looking for bottled water or a bedroom suite – it’s the thrill of ﬁnding brand-name merchandise that’s
We’re aggressively pursuing new ideas and business relationships that will help us deliver even more of the great deals
our customers know and love. Based on our research, we’ve launched the following key merchandising initiatives:
Buzz builders, basket builders, must-haves On average, our customers spend about $18 a trip. We have
challenged ourselves to develop strategies to capture a greater share of our existing customers’ wallet or weekly
spend. To achieve this goal, we are looking to build the value of the average basket through three speciﬁc
merchandise categories: buzz builders, basket builders, and must-haves. Buzz builders are the WOW items that
create excitement — the ones customers brag to their friends about (our famous-maker jeans at ridiculously
low prices are a good example). These are primarily closeouts and once-in-a-lifetime deals. Basket builders
are impulse items that increase the average sale, such as seasonal merchandise and snacks. And last,
must-haves are frequently purchased items we should always have in stock, such as pens, paper towels,
and tissues. The brand may vary, but we’ll always offer a great deal.
Raise the ring This is another merchandising and pricing strategy aimed at increasing the value of
our average basket. We’ll study the value of low-ticket items to our selling mix. In some categories, we’ll
experiment with larger package sizes that can generate a slightly higher average ticket.
Engineered closeouts and captive labels Closeouts will always be the biggest part of our business.
Often we acquire closeouts through package changes, canceled orders, discontinued items, or manufacturer
overruns. But many manufacturers have the ability to engineer closeouts just for Big Lots. We’re
building relationships with major manufacturers to help us bring even more brand-name deals to
our customers. In January 2006, we held our ﬁrst Big Lots Business Summit with over 100
executives from many of the nation’s leading companies to explore unique options we have
for working together.
We’re also starting to carry captive label brands, such as our Rival® dog food.
Rival was a brand-name dog food made many years ago, and we control the
rights to the name. The prospects for expanding our engineered closeout and
private label programs are very promising, and we hope to have more to
report on this front in the coming year.
A SELLING ORGANIZATION
In the past, our approach has been, If you buy it, they will come. Today
our priorities are different. It’s not enough to focus solely on the buy-side
of closeouts. We are directing our energy on being a buying and selling
organization. Going forward, every great “buy” will have multiple selling
mechanisms — a mixture of in-store, online, and multimedia marketing that will
communicate great value instantaneously.
Brand Names. Closeout Prices.® That’s our mantra. We will convey this message at every
sales touch-point. Our marketing activities will address print and broadcast advertising and,
most important, the in-store experience. Our research shows that the majority of our customers
come into Big Lots with no speciﬁc item in mind. They’re shopping just for the treasure hunt. That
means how we market inside our stores, how we present, and how well we execute across all merchandise
categories will be critical to growing our business. We’ll experiment with signage, color, and clearer sight lines
to help customers navigate the store and locate our great bargains. In February 2006, we launched a laboratory store
to test a number of new marketing concepts and merchandise presentations. Our print circulars are undergoing a
makeover too, and we’ll be tracking the distribution and effectiveness of our print advertising with a fresh eye. Also
look for new TV commercials.
FULL STEAM AHEAD
Our team enters 2006 with incredible momentum. Our accomplishments are a testimony to the efforts of our
44,000 associates who accepted the challenge to pick up the pace. Business is everything but usual, and we are not
afraid of change. In retail, it’s a necessity. We are literally changing the way closeouts are done. We’re not waiting for
vendors to call us. We’re making decisions about the merchandise we want to carry — how we want to buy it, price it,
market it, and distribute it efﬁciently. Every detail of our plan is designed to help us become a selling machine.
Testing of our strategies is already underway in a group of stores across the country and will continue through 2006.
Our testing phase gives all of us a chance to see strategy in action. Some of our ideas will be home runs. Others may
miss the mark, and frankly, that’s a good thing. If you never make a mistake, that means you’re not trying something
new, different, and exciting.
Exciting things are clearly happening — new directions, new marketing, and new horizons of opportunity that
make now the best time to be at Big Lots. The results of our testing in 2006 will lay the groundwork for reﬁning our
strategies and executing our successes in 2007. We will focus on the elements that are easily adaptable to our existing
store prototypes and roll them out efﬁciently and cost-effectively.
WOW is the endgame. We like to call it the closeout moment. It’s not always easy getting there. It takes exceptional
people with unrelenting determination and the drive to perform.
I believe in the Big Lots team. There will always be external forces that can impact our bottom line, from the national
economy to intense competition and even weather. But there is one force that is more powerful, and that force is us.
How we manage, how we work, how we look out for each other — these are the factors that will help separate a great
company from the rest of the pack.
Our niche as the nation’s most dominant broadline closeout retailer is one of our most important assets. We are not a
dollar store, and we are not a discount store. We are a company unlike any other, that goes where few other retailers
can follow. And we are committed to working together to make our company bigger, better, and stronger in returning
Thank you for your support and conﬁdence as we look forward to a great year.
Chairman, CEO, and President
directors and executives
BOARD OF DIRECTORS COMPANY EXECUTIVES
Sheldon M. Berman CHAIRMAN, CHIEF EXECUTIVE
VICE PRESIDENTS (Continued)
OFFICER & PRESIDENT
Chairman, Chief Executive
Ofﬁcer & President
Steven S. Fishman Craig A. Hart
Xtreem Creative, Inc. Merchandise Planning
Steven S. Fishman EXECUTIVE VICE PRESIDENTS Charles H. Howze
Chairman, Chief Executive
John C. Martin
Ofﬁcer & President Gary E. Huber
Big Lots, Inc.
Donald A. Mierzwa
Kathleen R. Hupper
David T. Kollat Real Estate Administration
President & Founder Brad A. Waite
Timothy A. Johnson
Human Resources, Loss Prevention, Real
22, Inc. Strategic Planning & Investor Relations
Estate & Risk Management
Brenda J. Lauderback Kathryn A. Keane
SENIOR VICE PRESIDENTS
former President –
Wholesale Group Stephen B. Marcus
Lisa M. Bachmann
Nine West Group, Inc. Information Technology/
Merchandise Planning & Allocation
Seth L. Marks
Philip E. Mallott Big Lots Capital
Robert C. Claxton
former Vice President & Marketing
Richard J. Marsan, Jr.
Chief Financial Ofﬁcer Merchandise Presentation
Joe R. Cooper
Intimate Brands, Inc.
Chief Financial Ofﬁcer Todd A. Noethen
Distribution Support Services
Ned Mansour Charles W. Haubiel II
General Counsel &
former President Judith A. Panoff
Corporate Secretary Divisional Merchandise Manager
Kent Larsson Jo L. Roney
Russell Solt Special Projects Human Resources Services
former Executive Norman J. Rankin Shelley L. Rubin
Vice President & General Merchandise Manager Advertising
Chief Financial Ofﬁcer
Harold A. Wilson Michael A. Schlonsky
West Marine, Inc. Distribution & Associate Relations &
Transportation Services Risk Management
James R. Tener
President & Paul A. Schroeder
VICE PRESIDENTS Controller
Chief Operating Ofﬁcer
Brook Mays Music Group Timothy C. Anderson Robert Segal
Store Control Divisional Merchandise Manager
Dennis B. Tishkoff Armen Bahadurian Steven R. Smart
Chairman & Wholesale Merchandise Manager Divisional Merchandise Manager
Chief Executive Ofﬁcer
Loyd R. Barron Sharon A. Smith
Drew Shoe Corporation Store Operations Allocation
William Coney Wayne W. Stockton
Store Operations Divisional Merchandise Manager
Kevin R. Day L. Michael Watts
Real Estate Tax
Charles Ellis Crystal L. Weary
Imports Divisional Merchandise Manager
Roger D. Erwin Stewart Wenerstrom
Store Operations Merchandise Support
Gregory W. Wilmer
Richard L. Fannin
Information Technology Development
Technology & Data Center Services
Kevin R. Wolfe
Charles C. Freidenberg
Divisional Merchandise Manager
Mollie M. Hall
Big Lots, Inc.
300 Phillipi Road
Columbus, Ohio 43228
April 19, 2006
You are cordially invited to attend the Annual Meeting of Shareholders of Big Lots, Inc., which will be held
at the Company’s corporate ofﬁce located at 300 Phillipi Road, Columbus, Ohio, on Thursday, May 25, 2006,
beginning at 9:00 a.m. EDT.
The following pages contain the formal Notice of Annual Meeting of Shareholders and the Proxy Statement.
You should review this material for information concerning the business to be conducted at the Annual
Meeting of Shareholders.
Your vote is important. Whether or not you plan to attend the Annual Meeting of Shareholders, you are urged
to complete, date and sign the enclosed proxy card and return it in the enclosed envelope. If you attend the
Annual Meeting of Shareholders, you may revoke your proxy and vote in person if you wish, even if you
have previously returned your proxy.
On behalf of the Board of Directors, we would like to express our appreciation for your continued interest in
the affairs of the Company.
STEVEN S. FISHMAN
Chief Executive Ofﬁcer and President
Big Lots, Inc.
300 Phillipi Road
Columbus, Ohio 43228
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2006
Notice is hereby given that the Annual Meeting of Shareholders of Big Lots, Inc. will be held at the
Company’s corporate ofﬁce located at 300 Phillipi Road, Columbus, Ohio, on Thursday, May 25, 2006,
beginning at 9:00 a.m. EDT. At the meeting, the holders of the Company’s outstanding common shares will
act on the following matters:
1. The election of nine directors of the Company;
2. The approval of the Big Lots 2006 Bonus Plan, in the form attached hereto as Appendix I; and
3. The transaction of such other business as may properly come before the meeting.
Only shareholders of record at the close of business on March 27, 2006, are entitled to notice of and to vote
at the Annual Meeting of Shareholders and any postponements or adjournment thereof.
By Order of the Board of Directors,
CHARLES W. HAUBIEL II
Senior Vice President, General Counsel
and Corporate Secretary
April 19, 2006
Your vote is important. Shareholders are urged to complete, date and sign the enclosed proxy card and
return it in the enclosed envelope to which no postage need be afﬁxed if mailed in the United States. If
you attend the Annual Meeting of Shareholders, you may revoke your proxy and vote in person if you
wish, even if you have previously returned your proxy.
Big Lots, Inc.
300 Phillipi Road
Columbus, Ohio 43228
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors
(the “Board”) of Big Lots, Inc., an Ohio corporation (the “Company”), for use at the Annual Meeting of
Shareholders (the “Annual Meeting”) to be held on May 25, 2006, at the Company’s corporate ofﬁce located
at 300 Phillipi Road, Columbus, Ohio. The Notice of Annual Meeting of Shareholders, this Proxy Statement
and the accompanying proxy card, together with the Company’s Annual Report to Shareholders for the ﬁscal
year ended January 28, 2006 (“ﬁscal 2005”), are ﬁrst being mailed to shareholders on or about April 19, 2006.
ABOUT THE ANNUAL MEETING
Purpose of the Annual Meeting
At the Annual Meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting
included with this Proxy Statement. Speciﬁcally, the shareholders will be asked to elect the Company’s
directors, approve the Big Lots 2006 Bonus Plan (the “2006 Bonus Plan”), and transact such other business
as may properly come before the Annual Meeting. In addition, management will report on the performance of
Shareholder Voting Rights
Only those shareholders of record at the close of business on March 27, 2006, the record date for the Annual
Meeting, are entitled to receive notice of and to vote at the Annual Meeting. At the record date, the Company
had outstanding 113,759,701 common shares, $.01 par value per share. Each of the outstanding common
shares is entitled to one vote on each matter voted upon at the Annual Meeting, or any postponement or
adjournment thereof. The holders of common shares have no cumulative voting rights in the election of
directors. All voting shall be governed by the Code of Regulations of the Company and the General
Corporation Law of the State of Ohio.
Registered Shareholders and Beneﬁcial Shareholders
If your common shares are registered in your name directly with the Company’s transfer agent, National City
Bank, you are considered, with respect to those common shares, a registered shareholder. The Notice of
Annual Meeting of Shareholders, Proxy Statement, proxy card, and 2005 Annual Report to Shareholders
have been sent directly to registered shareholders by the Company.
If your common shares are held in a brokerage account or by a bank or other holder of record, you are
considered the beneﬁcial owner of common shares held in street name. The Notice of Annual Meeting of
Shareholders, Proxy Statement, proxy card, and 2005 Annual Report to Shareholders have been forwarded to
you by your broker, bank or other holder of record who is considered, with respect to those common shares,
the registered shareholder. As the beneﬁcial owner, you have the right to direct your broker, bank or other
holder of record on how to vote your common shares by using the voting instruction card included in the
mailing or by following their instructions for voting electronically.
Attendance at the Annual Meeting
All shareholders as of the record date, or their duly appointed proxies, may attend the Annual Meeting.
Registration and seating will begin at 8:30 a.m. EDT, and the Annual Meeting will begin at 9:00 a.m. EDT. If
you attend, please note that you may be asked to present valid picture identiﬁcation, such as a driver’s license
or passport. Cameras, recording devices and other electronic devices will not be permitted at the Annual
Meeting. Please also note that if you hold your common shares as a beneﬁcial shareholder, you will need to
bring a copy of a brokerage statement reﬂecting your stock ownership as of the record date and check in at
the registration desk at the Annual Meeting.
How to Vote
You may vote by completing, dating and signing the accompanying proxy card and returning it in the
enclosed envelope. You may also vote online at www.proxyvote.com until May 24, 2006 at 11:59 p.m. EDT.
If you wish to vote online, you will need your proxy card and must follow the instructions posted on the
website. If you complete, date, sign and return your proxy card or you properly complete your proxy via the
Internet, your shares will be voted as you direct.
If you are a registered shareholder and attend the Annual Meeting, you may deliver your completed proxy card
in person. Beneﬁcial shareholders who wish to vote at the Annual Meeting will need to obtain a proxy form
from the broker or other nominee that is the registered holder of the common shares. Additionally, beneﬁcial
shareholders may be able to instruct the broker or other nominee how to vote by telephone or electronically, so
please contact your broker or other nominee to determine availability and applicable deadlines.
A proxy may be revoked at any time before it is exercised by ﬁling with the Secretary of the Company a
notice of revocation or a duly executed proxy bearing a later date. A proxy may also be revoked by attending
the Annual Meeting and giving notice of revocation to the Secretary of the meeting, either in writing or in
open meeting. Attendance at the Annual Meeting will not by itself revoke a previously granted proxy.
The Securities and Exchange Commission (“SEC”) has enacted a regulation that allows multiple shareholders
residing at the same address the convenience of receiving a single copy of annual reports, proxy statements,
notices of shareholder meetings, and other documents if they consent to do so. Please note that if you do not
respond to the householding election, householding will begin 60 days after the mailing of the Proxy
Statement. Householding will be permitted only upon certain conditions, including where you agree to or do
not object to the householding of your materials and you have the same last name and address as another
shareholder. If these conditions are met, and SEC regulations allow, your household will receive a single copy
of annual reports, proxy statements, notices of shareholder meetings, and other documents.
The householding election that appears on the enclosed proxy card provides a means for you to notify us
whether or not you consent to householding. By marking “yes” in the box provided, you will consent to
householding. By marking “no” in the box provided, you withhold your consent to participation. If you do
nothing, you will be deemed to have given your consent to householding. Your consent to householding will
be perpetual unless you revoke it. You may revoke your consent at any time by contacting Automatic Data
Processing, Inc. (“ADP”), either by calling 1-800-542-1061, or by writing to: ADP-ICS, Householding
Department, 51 Mercedes Way, Edgewood, New York 11717. You will be removed from the householding
program within 30 days of receipt of your response, following which you will receive an individual copy of
our disclosure document.
Beneﬁcial owners can request more information about householding from their banks, brokers or other holders
Electronic Delivery of Proxy Materials and Annual Report
In lieu of receiving paper copies of next year’s proxy materials and annual report in the mail, shareholders
may elect to receive these documents electronically via e-mail or the Internet. By opting to access these
documents electronically, you will save the Company the cost of producing and mailing documents to you,
reduce the amount of mail you receive, and help preserve environmental resources. To enroll in the electronic
delivery service for future annual meetings, use your proxy card information to register online at
www.proxyvote.com by indicating that you agree to receive or access shareholder communications
electronically in future years.
Tabulation of the Votes
Tabulation of the votes cast at the Annual Meeting will be performed by ADP, as inspected by duly appointed
ofﬁcers of the Company.
Unless you give other instructions on your proxy card (excluding broker non-votes), the persons named as
proxy holders on the proxy card will vote the common shares in accordance with the recommendations of the
Board. The Board’s recommendation is set forth together with the description of each proposal in this Proxy
Statement. In summary, the Board recommends a vote FOR election of the nominated slate of directors (see
Proposal One), and FOR the approval of the 2006 Bonus Plan (see Proposal Two). If any other matter
properly comes before the Annual Meeting, or if a director nominee named in the Proxy Statement is unable
to serve or for good cause will not serve, the proxy holders will vote on such matter or for such substitute
nominee as recommended by the Board.
Vote Required to Approve a Proposal
For purposes of Proposal One, the nine director nominees receiving the greatest number of votes cast shall be
elected. A properly executed proxy marked “withhold authority” with respect to the election of one or more
nominees for director will not be voted with respect to the nominee or nominees for director indicated,
although it will be counted for purposes of determining whether there is a quorum. If you are a beneﬁcial
shareholder, your broker or other nominee that is the registered holder of your common shares is permitted to
vote your shares for the election of directors even if the broker or other nominee does not receive voting
instructions from you.
For purposes of Proposal Two and any other matters that may properly come before the Annual Meeting, the
afﬁrmative vote of the holders of a majority of the common shares represented in person or by proxy and
entitled to vote on each such matter will be required for approval. A properly executed proxy marked
“abstain” with respect to any such matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote. If
no voting instructions are given (excluding broker non-votes), the persons named as proxy holders on the
proxy card will vote the common shares in accordance with the recommendations of the Board.
If you are a beneﬁcial shareholder, your broker or other nominee may not be permitted to exercise
discretionary voting power with respect to some of the matters to be acted upon. Thus, if you do not give
your broker or other nominee speciﬁc voting instructions, your common shares may not be voted on those
matters and will not be counted in determining the number of common shares necessary for approval.
Common shares represented by such “broker non-votes” will, however, be counted in determining whether
there is a quorum.
The presence, in person or by proxy, of the holders of a majority of the outstanding common shares entitled to
vote at the Annual Meeting will constitute a quorum, permitting the Company to conduct its business at the
Annual Meeting. Proxies received but marked as abstentions and broker non-votes will be included in the
calculation of the number of votes considered to be present at the Annual Meeting for purposes of establishing
PROPOSAL ONE: ELECTION OF DIRECTORS
At the Annual Meeting, the common shares of the Company represented by proxies will be voted,
unless otherwise speciﬁed, for the election of the nine director nominees named below. All nine nominees
are currently directors of the Company. Proxies cannot be voted at the Annual Meeting for more than
Set forth below is certain information relating to the nominees for election as directors. Directors are elected
to serve until the next annual meeting of shareholders and until their respective successors are elected and
qualiﬁed, or until their earlier death, resignation or removal.
Principal Occupation Director
Name Age for the Past Five Years Since
Sheldon M. Berman 65 Chairman, Chief Executive Ofﬁcer and President, Xtreem Creative, Inc. 1994
(business planning, marketing planning, and advertising services).
Steven S. Fishman 54 Chairman, Chief Executive Ofﬁcer and President of the Company; 2005
former President, Chief Executive Ofﬁcer and Chief Restructuring
Ofﬁcer, Rhodes, Inc. (furniture retailer) — Rhodes, Inc. ﬁled for
bankruptcy on November 4, 2004; former Chairman and Chief
Executive Ofﬁcer, Frank’s Nursery & Crafts, Inc. (lawn and garden
specialty retailer) — Frank’s Nursery & Crafts, Inc. ﬁled for bankruptcy
on September 8, 2004; former President and Founder, SSF Resources,
Inc. (investment and consulting).
David T. Kollat 67 President and Founder, 22, Inc. (research and management consulting). 1990
Brenda J. Lauderback 55 Former President — Wholesale Group, Nine West Group, Inc. (retail 1997
and wholesale footwear); former President — Footwear Wholesale,
U.S. Shoe Corporation (retail and wholesale footwear); former Vice
President, General Merchandise Manager, Dayton Hudson Corporation
Philip E. Mallott 48 Independent ﬁnancial consultant; retail stock analyst, Coker & Palmer 2003
(securities brokerage services); former Vice President and Chief
Financial Ofﬁcer, Intimate Brands, Inc. (retail stores).
Ned Mansour 57 Former President, Mattel, Inc. (designer, manufacturer and marketer of 2003
Russell Solt 58 Director of Investor Relations, West Marine, Inc. (specialty retailer and 2003
catalog company); former Executive Vice President and Chief Financial
Ofﬁcer, West Marine, Inc.; former Senior Vice President and Chief
Financial Ofﬁcer, West Marine, Inc.; former President, Venture Stores
James R. Tener 56 President and Chief Operating Ofﬁcer, Brook Mays Music Group (retail 2005
and wholesale music); former Chief Operating Ofﬁcer, The Sports
Authority (sporting goods retailer).
Dennis B. Tishkoff 62 Chairman and Chief Executive Ofﬁcer, Drew Shoe Corporation 1991
(manufacture, import and export, retail and wholesale footwear);
President, Tishkoff and Associates, Inc. (retail consultant); former
President and Chief Executive Ofﬁcer, Shoe Corporation of America
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE
NOMINEES LISTED ABOVE.