Project Jefferson

January 22, 2008

Presentation to the Independent Committee of the

Board of Directors

STRICTLY CONFIDENTIAL

Exhibit (c)(4)

1

Disclaimer

The accompanying material was compiled on a confidential basis for use solely by the Independent Committee of Board of Directors

of Jefferson (the “Committee”) in evaluating the proposed transaction described therein.  This material is not intended to provide the

sole basis for evaluating the transaction, does not purport to contain all information that may be required and should not be considered

a

recommendation

with

respect

to

the

transaction.

This

material

was

prepared

for

a

specific

use

by

specific

persons

and

was

not

prepared

with

a

view

to

public

disclosure

or

to

conform

with

any

disclosure

standards

under

securities

laws

or

otherwise.

Nothing

contained in the accompanying material is, or shall be relied upon as, a promise or representation as to the past, the present or the

future.  UBS Securities LLC (“UBS”) undertakes no obligation to update or revise the accompanying material.

It should be understood that any estimates, valuations and/or projections contained in the accompanying material were prepared or

derived from information supplied by Jefferson and public sources without the assumption by UBS of responsibility for any

independent

verification

thereof.

Accordingly,

neither

UBS

nor

any

of

its

officers,

directors,

employees,

affiliates,

advisors,

agents

or

representatives warrants the accuracy or completeness of any such information, including without limitation, the accuracy or

achievability of any such estimates, valuations, and/or projections.  Actual results may vary from such estimates, valuations and/or

projections and such variations may be material.  This material must not be copied, reproduced, distributed or passed to others at any

time without the prior written consent of UBS.

2

Project Jefferson: Comparison of Catterton

Key Deal Terms

Merger Agreement Key Terms

Amended Merger Agreement Key Terms

Consideration

to Shareholders

$6.70 per share in cash, without interest

$4.50 per share

in cash, without interest

Additional Consideration

to the Company

$25.0 million subordinated loan¹

–

8% payable-in-kind interest; increases to 10% payable-

in-kind interest after 7/1/2008

–

Matures 6 months after maturity of Borrower current

Credit Facility (6/30/2012)

–

Covenant-Lite

Closing Conditions; MAE

No lease condition

No financing condition; BOA consent and waiver agreement

has been signed

Rollover shareholders must perform their commitments

MAE language has been negotiated

Removed

results

of

operations

of

the

Company

from

the

definition of MAE

Go-Shop

35 days with open go-shop provision (i.e., Topps)

35 days with open go-shop provision (i.e., Topps)

Fiduciary-out Termination

Right

Subject to matching rights

–

Catterton

will

have

5

business

days

to

match

Subject to matching rights

–

Catterton

will have 5 business days to match

Break-up Fee

2.5% of equity value (plus expense reimbursement not to

exceed 0.50%) during go-shop period or if deal is signed

with an "excluded party"; 4.0% (plus expense

reimbursement) otherwise

2.5% of equity value (plus expense

reimbursement not to

exceed 2.0%) if deal is signed with an "excluded party";

4.0% (plus expense reimbursement) otherwise

Reverse

Break-up Fee

4.0% of equity value (plus expense reimbursement)

Fund guarantee of obligations

$10.7

million

(equals

4.0%

of

prior

equity

value,

6.0%

of

amended equity value)

No Vote Break-up Fee

1% of equity value

1% of equity value

Shareholder Rollover

8.0 million shares (20.5% of basic shares

outstanding)

Rollover

shareholders:

Shares (mm)

($mm)

–

Gary Friedman

1.0

$6.7

–

Glenhill

Advisors

3.6

24.1

–

Reservoir Capital

2.1

14.1

–

Palo Alto Investors

1.3

8.7

–

Total

8.0

$53.6

Vardon

Capital to agree to a cash investment equal in

value

to the value

of 3.45mm shares

8.0 million shares (20.5% of basic shares outstanding)

Rollover shareholders:

Shares (mm)

($mm)

–

Gary Friedman

1.0

$4.5

–

Glenhill

Advisors

3.6

16.2

–

Reservoir Capital

2.1

9.5

–

Palo Alto Investors

1.3

5.9

–

Total

8.0

$36.1

Vardon

Capital to agree to a cash investment equal in value

to the value of 3.45mm shares

Note:

1

UBS is not opining to the fair value of the subordinated loan

3

Financial Summary—Management Forecasts (Amended Merger Agreement)

Management

Fiscal Year¹

2004A

2005A

2006A

2007E

2008E

2009E

2010E

Total Revenue²

$525.8

$581.7

$712.8

$730.9

$741.3

$803.6

$857.4

EBIT

$4.1

$0.9

$10.6

($17.6)

($4.9)

$7.3

$16.8

EBIT Margin

0.8%

0.2%

1.5%

(2.4%)

(0.7%)

0.9%

2.0%

EBITDA

$20.0

$20.5

$32.3

$4.9³

$17.7

$30.2

$39.2

EBITDA Margin

3.8%

3.5%

4.5%

0.7%

2.4%

3.8%

4.6%

Net Income

$1.7

($29.3)

$3.3

Net Income Margin

0.3%

(5.0%)

0.5%

Capital Expenditures

$13.4

$29.7

$15.2

$12.3

$11.0

$11.1

$11.5

Notes:

1

Fiscal

Year

Ending

January

31

of

the

following

year

2

Includes external revenue and all segment revenues

3

Excludes non-recurring items (primarily transaction-based costs, operating losses from Brocade business, and Orion settlement) of $5.4mm in 2007

4

Stock Price Performance

Pre-Announcement

(11/7/07)

Moving Averages:

30-Day:

$3.08

60-Day:

$3.18

90-Day

$3.69

Source:     FactSet

Amended Merger Price

($4.50) Premium:

30-Day:

45.9%

60-Day:

41.7%

90-Day

21.9%

0.00

2.00

4.00

6.00

8.00

10.00

11/6/2006

2/1/2007

4/30/2007

7/26/2007

10/22/2007

1/18/2008

Original Agreement = $6.70

Amended Agreement = $4.50

Date of Original

Agreement = 11/8/07

11/19/2007

Sears files 13-D, announcing

ownership of 13.7% of

RSTO stock

12/14/2007

Sears submits draft

merger agreement to

purchase all shares of

RSTO for $6.75 each

through cash tender offer

12/10/2007

RSTO reports 3rd quarter

results; EBITDA ($7mm) vs.

$1.8mm prior year;

announces that they will not

be giving Q4 and FY

guidance

1/11/2008

RSTO

announces holiday

sales; sales down

1% over prior year

5

Selected Trading Statistics¹

Enterprise Value/

Enterprise Value/

Market

Enterprise

LTM

FY07E

FY08E

LTM

FY07E

FY08E

P/E

P/E/G

LT EPS

LTM EBITDA

Price Decline

Cap

Value

Sales

Sales

Sales

EBITDA

EBITDA

EBITDA

FY07E

FY08E

FY07E

FY08E

Growth²

Margin

Since 11/7/07

Company

($mm)

($mm)

(x)

(x)

(x)

(x)

(x)

(x)

(x)

(x)

(x)

(x)

(%)

(%)

(%)

Jefferson (Management) @ Market

3

159

288

0.39

0.39

0.39

29.9

58.8

16.3

nm

nm

nm

nm

32.5

1.3

nm

Jefferson (Management) @ $4.50 Bid ³

178

308

0.41

0.42

0.42

31.9

62.8

17.4

nm

nm

nm

nm

32.5

1.3

nm

Home Furnishings / Improvement

Home Depot

44,519

56,358

0.63

0.73

0.73

5.5

6.2

6.5

10.3

11.8

0.8

1.0

12.3

11.6

(9.7)

Lowe's

32,528

37,746

0.78

0.78

0.74

5.9

6.2

6.2

11.6

12.1

0.8

0.8

15.1

13.3

(9.5)

Bed Bath & Beyond

7,086

6,709

0.94

0.95

0.88

6.4

6.8

6.7

12.7

12.5

0.9

0.9

13.9

14.7

(14.0)

Williams-Sonoma

2,284

2,365

0.62

0.60

0.59

5.1

5.2

5.4

11.6

12.2

0.9

0.9

13.3

12.1

(26.8)

Ethan Allen

724

793

0.78

0.79

0.79

5.4

5.7

5.8

10.1

9.8

1.3

1.3

7.7

14.6

(18.8)

Mean

0.75

0.77

0.75

5.7

6.0

6.1

11.3

11.7

0.9

1.0

12.5

13.2

(15.8)

Median

0.78

0.78

0.74

5.5

6.2

6.2

11.6

12.1

0.9

0.9

13.3

13.3

(14.0)

Other Specialty Retail -

Large Cap

Best Buy

18,784

18,197

0.46

0.45

0.41

6.7

6.5

5.9

13.1

12.7

0.9

0.8

15.3

6.9

(4.8)

Staples

15,513

14,814

0.77

0.76

0.70

7.5

7.5

6.9

15.1

13.7

1.0

0.9

15.6

10.2

0.4

OfficeMax

1,446

1,765

4

0.19

0.19

0.19

3.8

3.9

3.7

8.3

7.8

0.7

0.6

12.3

5.1

(26.2)

Mean

0.47

0.47

0.43

6.0

6.0

5.5

12.2

11.4

0.8

0.8

14.4

7.4

(10.2)

Median

0.46

0.45

0.41

6.7

6.5

5.9

13.1

12.7

0.9

0.8

15.3

6.9

(4.8)

Other Specialty Retail -

Mid Cap

Cabela's

811

1,308

0.58

0.55

0.46

6.5

5.7

4.8

8.6

7.6

0.6

0.5

14.6

8.9

(27.7)

Conn's

369

346

0.43

0.42

0.37

4.9

4.6

4.1

9.4

8.0

0.7

0.6

12.7

8.8

(33.8)

Jo-Ann Stores

245

417

0.22

0.22

0.22

5.0

4.7

3.9

16.4

10.6

1.1

0.7

15.0

4.4

(45.9)

hhgregg

303

420

0.36

0.33

0.27

5.5

5.4

4.5

9.6

7.3

0.5

0.4

20.8

6.6

(38.2)

A.C. Moore

206

182

0.31

0.31

0.28

6.4

6.2

4.3

17.6

11.0

0.8

0.5

22.2

4.9

(36.6)

Mean

0.38

0.37

0.32

5.7

5.3

4.3

12.3

8.9

0.7

0.5

17.1

6.7

(36.4)

Median

0.36

0.33

0.28

5.5

5.4

4.3

9.6

8.0

0.7

0.5

15.0

6.6

(36.6)

Source: Company filings, press releases, earnings call transcripts, Jefferson Management Team and IBES mean estimates

Notes:

1   As of January 18, 2008

2   Estimates are IBES mean estimates

4   Adjusted to not include Securitized Timber Notes

Overall High

0.94

0.95

0.88

7.5

7.5

6.9

17.6

13.7

1.3

1.3

22.2

14.7

0.4

Overall Mean

0.55

0.54

0.51

5.7

5.7

5.3

11.9

10.6

0.8

0.8

14.7

9.4

(22.4)

Overall Median

0.58

0.55

0.46

5.5

5.7

5.4

11.6

11.0

0.8

0.8

14.6

8.9

(26.2)

Overall Low

0.19

0.19

0.19

3.8

3.9

3.7

8.3

7.3

0.5

0.4

7.7

4.4

(45.9)

3

Estimates provided by Jefferson Management Team and excludes non-recurring items (primarily transaction-based costs, operating losses from Brocade business, and Orion Settlement)   

of $5.4mm in 2007

6

Selected Precedent Transaction Statistics

Notes:

1

Enterprise Value equal to fully diluted equity value plus total debt and minority interest minus cash and cash equivalents (all at book value)

2

Ares

acquired

19.9%

of

the

equity;

precedent

assumes

exercise

of

option

for

additional

30.2%

equity

stake

at

$126.8mm,

with

equity

value

grossed

up

to

100%

and

includes

revolver,

CMBS

and

seller note to Sears

3

Offer price for Brookstone was revised from $20.50 down to $20.00 in July 2005 prior to closing due to weak financial results post transaction announcement

4     Based on Jefferson management estimates

Announcement

Date

Acquiror

Target

FD Market

Value

($mm)

EV¹

($mm)

LTM

Sales

(x)

LTM EBITDA

(x)

LTM

EBITDA

Margin (%)

Nov-06

Dick’s Sporting Goods

Golf Galaxy

220

210

0.84

10.9

7.7

Jul-06

Leonard Green, Texas Pacific Group

PETCO

1,679

1,815

0.89

8.9

10.0

Jun-06

Bain Capital, Blackstone

Michaels Stores

6,046

5,604

1.52

11.0

13.8

May

-06

PPR

Sportsman Guide

265

256

0.88

14.3

6.1

Jan-06

Leonard Green & Partners

The Sports Authority

1,021

1,372

0.55

8.3

6.7

Dec-05

Best Buy

Pacific

Sales

Kitchen

and

Bath

Centers

na

410

1.28

na

na

Nov-05

Ares Management

Orchard

Supply

Hardware

2

na

776

2

na

na

na

Nov-05

Apollo Management

Linens 'n Things

1,292

1,284

0.48

9

.1

5.

3

Sep-05

Berkshire Partners, Weston Presido

Party City

374

363

0.72

13

.1

5.

5

Apr

-05

J.W.

Childs,

Osim

International,

Temasek

Holdings

Brookstone

3

441

402

0.80

8.5

9.4

Jun-03

Bed Bath & Beyond

Christmas Tree Shops

na

200

0.54

na

na

High

6,046

5,604

1.52

14.3

13.8

Mean

1,417

1,154

0.85

10.5

8.1

Median

731

410

0.82

10.0

7.2

Low

220

200

0.48

8.3

5.3

Jefferson @ $4.50 Bid

4

178

308

0.41

31.9

1.3

7

Discounted Cash Flow Analysis

Key Assumptions

Free cash flow through 2010 calculated from Jefferson latest

management projections

Discounted end-year cash flows

Terminal value calculated based on a multiple of 2010 EBITDA

Assumed transaction date of 2/4/08

Tax rate of 40.0%

Assumes net debt balance of $100.7 million, estimated as of

2/4/08

Price Per Share

Enterprise Value

Implied TEV/2008E EBITDA Multiple¹

Note:

1   Based on Jefferson Management estimates

Discount

Terminal Multiple

Rate

7.0x

8.0x

9.0x

15.5%

$2.78

$3.42

$4.06

16.5%

$2.65

$3.27

$3.89

17.5%

$2.52

$3.13

$3.74

Discount

Terminal Multiple

Rate

7.0x

8.0x

9.0x

15.5%

11.9x

13.3x

14.7x

16.5%

11.6x

13.0x

14.4x

17.5%

11.3x

12.7x

14.0x

Discount

Terminal Multiple

Rate

7.0x

8.0x

9.0x

15.5%

$210

$236

$261

16.5%

$205

$230

$255

17.5%

$200

$224

$248

8

Contact Information

UBS Securities LLC

299 Park Avenue

New York NY 10171

Tel. +1-212-821 3000

www.ubs.com

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