The following Table of Contents has been inserted for convenience of reference only and does not constitute a part of the Collateral Agreement.

TABLE OF CONTENTS

SECTION
1.		The Security Interests			1
2.		Definitions			2
3.		Representations and Warranties of the Pledgor			7
4.		Representations, Warranties and Agreements of the Collateral Agent and the Securities Intermediary			8
5.		Certain Covenants of the Pledgor			9
6.		Administration of the Collateral			13
7.		Income and Voting Rights on Collateral			18
8.		Remedies upon the Occurrence of an Acceleration Event			18
9.		The Collateral Agent and the Securities Intermediary			22
10.		Amendment			26
11.		Miscellaneous			28
12.		Termination of Collateral Agreement			29
Exhibit A Certificate for Substituted Collateral
Exhibit B Certificate for Additional Collateral

COLLATERAL AGREEMENT

          THIS COLLATERAL AGREEMENT (the Agreement), dated as of August 16, 2006, among Retail Ventures, Inc., an Ohio corporation (the Pledgor), HSBC Bank USA, National Association, as collateral agent (in such capacity, the Collateral Agent) for the benefit of HSBC Bank USA, National Association, as indenture trustee under the Indenture (in such capacity, together with its successors in such capacity, the Indenture Trustee), the Indenture Trustee and HSBC Bank USA, National Association, as securities intermediary in respect of the Collateral Account (as defined below) (in such capacity, the Securities Intermediary).

WITNESSETH:

          WHEREAS, pursuant to the Indenture (the Indenture), dated as of the date hereof, between Pledgor and the Indenture Trustee, the Pledgor has issued 6.625% Mandatorily Exchangeable Notes due September 15, 2011 in aggregate principal amount of $125,000,000 ($143,750,000 if the Underwriters option to purchase additional notes is exercised in full) (such notes, inclusive of all notes issued pursuant to Underwriters option, the Notes), which require the Pledgor to deliver (x) a specified number of Class A common shares, no par value per share (the DSW Class A Common Shares), of DSW Inc., an Ohio corporation (DSW) or (y) a specified number of units of other property, if applicable, or (z) the cash value thereof;

          NOW, THEREFORE, to secure the performance by the Pledgor of its obligations under the Notes and to secure the observance and performance of the covenants and agreements contained herein and in the Indenture, the parties hereto agree as follows:

     1. The Security Interests.

          In order to secure the Pledgors obligation to deliver the DSW Class A Common Shares to the holders of the Notes in accordance with the terms of the Notes:

          (a) Security Interests. The Pledgor hereby grants and pledges unto the Collateral Agent, as agent of and for the benefit of the Indenture Trustee, for the benefit of the Holders from time to time of the Notes, a security interest in and to, and a lien upon, all of the Pledgors right, title and interest in and to:

          (i) stock certificate number B-2 evidencing the Firm Share Base Amount (as defined herein);

          (ii) the Pledged Items described in Sections 1(b) and (c);

          (iii) all additions to and substitutions for such Pledged Items (including, without limitation, any securities, instruments, cash or other property delivered, pledged or purchased pursuant to Section 5(i), 6(b) or (c));

          (iv) all income, collections and proceeds (as defined in the UCC (as defined below), including for the avoidance of doubt, any securities, instruments or other property distributed or distributable with respect to any items described in Section 1(a)(i),

(ii), (iii) or (iv), including, without limitation, any dividends, distributions or other property received or receivable on account of a merger, consolidation, conversion or similar change in the corporate identity or structure of the issuer of any of the items described in Section 1(a)(i), (ii), (iii) or (iv)), received or to be received, or derived or to be derived, now or any time hereafter from or in connection with any Pledged Items (whether such proceeds arise before or after the commencement of any proceeding under any applicable bankruptcy, insolvency or other similar law, by or against the Pledgor with respect to the Pledgor) (the Proceeds);

          (v) the Collateral Account, all securities and other financial assets (each as defined in Section 8-102 of the UCC) and other funds, property or assets from time to time held therein or credited thereto and all security entitlements in respect thereof; and

          (vi) all powers and rights now owned or hereafter acquired under or with respect to the Pledged Items,

(such Pledged Items, additions, substitutions, income, Proceeds, collections, powers and rights described in clauses (i) through (vi) above being herein collectively called the Collateral). The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement. Notwithstanding anything contained herein to the contrary, those items of Collateral described in the foregoing Sections 1(a)(iii) and (a)(v) shall at no time include any assets which constitute collateral of the Pledgors revolving credit lenders.

          (b) Initial Pledge Date. On the date hereof, the Pledgor shall deliver to the Collateral Agent in pledge hereunder Eligible Collateral (as defined below) consisting of 4,560,500 DSW Class B Common Shares (the Firm Share Base Amount), in the manner provided in Section 6(d).