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

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

He said that the Value City situation needs "a plan to understand where the brand stands today, and what strategic options are available to us," adding that he and Politzer are working on such a plan, and that they'll act swiftly to make whatever changes necessary to strengthen Value City.