Dana Telsey: On the outlet malls, what are you seeing there and what levers are you using to drive that expense control?
Kay Krill: Our Factory concept is built on taking Ann Taylor bestsellers from last year, colorizing them to this year''s color pallet, and offering them about 30% to 40% less than price and that whole philosophy and that concept, that strategy is working very well. We are seeing decreased traffic in the Factory environment as well, but our in-store metrics are strong based on the product and based on our marketing efforts.
Lizabeth Dunn: On the boomer customer, elaborate your decision to go after this market?
Kay Krill: We believe that this segment of the market is the most underserved, and as a company, we have a distinct heritage and upscale on stylish fashion that we believe we can bring to bear in this market. There are number of companies that currently play in the broader boomer market and our participation will reflect who we are as a company.
Lizabeth Dunn: Any comments on cannibalization?
Kay Krill: We do not expect cannibalization because it really is a different age group that we are going after.
Lizabeth Dunn: You talk about August trends being a little bit better than July, is that traffic or what you are calling controllable metrics?
Kay Krill: It is not traffic. It is controllable metrics, and better product assortment.
Neely J. Tamminga: How are you managing the people side of this, not just process and systems, have you been making pretty key hirers below the press release level?
Kay Krill: With the addition of Mark Mendelson running the new concept, we have a strong leader in Ann Taylor, leading the Ann Taylor business. We have strong leadership in LOFT. We have added a few new hires underneath that we have not done press releases on but are senior levels that I think are adding a ton of value so far
Neely J. Tamminga: And in terms of collection have you moved someone from the Ann Taylor business over there?
Kay Krill: No, that is being managed through the existing team as much of our initiatives are being managed through the existing team.
Samantha Panella: Where are you in terms of the workforce management system?
Kay Krill: We have ruled out the workforce management system in Ann Taylor and the Factory division, and we are half way there in LOFT and expect to be finished in the next two to three weeks.
Samantha Panella: What are you seeing on the comp basis in those stores, in terms of the LOFT?
Jim Smith: And as far as the LOFT, we are just rolling head out now and will be in a few weeks. So, we will see the full benefit of this in next year.
Crystal Kallik: You talked about workforce management and anymore updates you have with the progress in assortment planning?
Kay Krill: It is fully rolled out in the system right now, and everyone is using it for their 2008 assortment building.
Crystal Kallik: Looking at the second half as far as the near term cost reductions, is it fairly even between the third and fourth quarter or should we assume any disparity between those two quarters?
Jim Smith: For the fall season will be comparable to last year.
Roxanne Meyer: How many SKUs do you plan to have in your Ann Taylor collection, and are you concerned that in the backdrop of the macro-economic environment that it may be hard to gain attraction in the near term?
Kay Krill: It is a more limited assortment for Ann Taylor collection.
Jim Smith: And you got to remember, it is going to be 24 of our best stores that have the capacity for it.
Marni Shapiro: Discuss the inventory reduction in the back half of the year?
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