Greg Scott: We saw weaker performance in the Arizona market. We saw weaker performance in our Southern California, particularly Orange County market in the Central Valley market. Florida still continues to be a stronghold. Now, one part of our business in Florida continues to be international tourists. The South Americans, Latin Americans, people from Europe love the bebe brand. I was just in 15 Florida stores in January. If you are in Aventura, if you are in Southeast, 50% of that client is from out of the country. We are still seeing strong business in the Florida region, though, the other areas that are significantly hit by the housing market, and lines up from what I see from the news, we see it in our business.

Brad Stephens (Morgan Keegan): Historically one thing that the customer likes about bebe is that when she came in the store, she knew she saw an item, and it was not going to be there three months later. When you do some of your buys, you are buying it and you are bringing back trench coats or whatever it is a month or two later. Is there any thought about changing it back to where it was before to make it more of a must-have item or do you like the flow the way it is now?

Greg Scott: Within that model, we had great reorder business that does not seem to affect that customer''s desire to buy that product, and what you see on that, and I go back all the way to England on the roadshow, it is about core bebe basics like the trench coat, like a pant, like a V-neck sweater, like a top, that are kind of staples in her wardrobe that she is okay buying three or four colors. It is those fashion items, that those must have that she does not want to see a lot. It is that mix and balance that I need to return our business to, which was the hallmark of our business and drove our success in the late 90s and also in 2004 and 2005.

Brad Stephens (Morgan Keegan): Can you give more detail on the collaboration effort, price points relative to bebe categories?

Greg Scott: If you did not get to read Women’s Wear today or you will see that Tara Subkoff for bebe and the design lab mean, I do not want anyone to write about it because it is not confirmed, that name, but it is really something that Manny has done, which is great and he has been finding some designers to design special collections right now. The Tara Subkoff for bebe line has her name on it, not all of them will, and we actually did a small press luncheon. There was a luncheon last week in New York, and we are going to have an event about next two weeks from now in New York for a fashion week event. It will be a small dinner for Tara. We are not doing a ton of marketing, but the great thing about Tara is that the underground PR on it has been amazing. It hit Women’s Wear this morning. It was on about ten blogs in about half an hour about it, and the response will be great on Saturday. The price points we believe should be about in line with the bebe collection. It should not be higher it should not be lower.

Lyn Walther (Wachovia Securities): Price does not seem to be the main factor driving her. We have seen some of the lower priced fashion retailers seem to faring better in this environment. What is your take on what is going on there?

Greg Scott: We look at that and one of the reasons I went out for some prices because I thought the consumer might have less to spend. But time and time again, she proved to us in November and December that she wanted the fashion at whatever retail that was right for the value versus fashion at the wrong retail or the lower retail. I believe that especially because we tested it significantly in November and December. I can not comment why the lower price retailers continue to do well if they are, I do not know who they are, but I can not comment why I think they are.

Lyn Walther (Wachovia Securities): You have been posting negative comps for almost a year now and you have been managing expenses tightly. When did you start reining in SG&A and how do you annualize that now, which combined with the extra week is causing more de-leveraging this quarter?

Walter Parks: We were flat in the fiscal third quarter last year. It has been three quarters, not a year yet. We were disappointed with our performance in the fiscal second quarter last year. Since that time we have done a better job managing our variable expenses. I believe that our expectation is as we go forward we will continue to do that.

Holly Guthrie (Janney Montgomery Scott): You said that your guidance for comp store sales is in the negative mid-single digit. Does that mean that January is running in that frame now?

Walter Parks: January is currently better than last quarter.

Holly Guthrie (Janney Montgomery Scott): Could you go through the circulation plan for the third quarter both core and SPORTs?

Greg Scott: 1.5 million for bebe versus 550,000 last year and this is driven by one, we introduced an incremental accessory book in January for about 500,000 clients of that on top of nothing and then we are going to mail in March about a million versus 550 last year. We are going to have incremental mailing this year though we believe we are heading in that March book to the right depth files and we believe, it is going after the accessory book in time for Valentine''s Day was the right idea to add that book. There was no SPORT book last year. We do not have a SPORT catalog in March.

Walter Parks: Correct, but we have print advertising with Eva.

Greg Scott: Yes and we do have a direct mail for SPORT which we just mailed last week. It was 100,000.

Holly Guthrie (Janney Montgomery Scott): You mentioned a few countries like Saudi Arabia and the Kuwait. Are those all new countries and when do you expect those stores to be opened?

Greg Scott: The seven new countries that I mentioned were Saudi Arabia, Egypt, Kuwait, Russia, Ukraine, Romania and Mexico. We are planning to open in Mexico City this April. That will be the first of these new countries that we will be opening and we are excited about that opening a fairly large store in the Polanco area of Mexico City.

Walter Parks: The expectation is to open possibly in Egypt this spring, but probably next fall. Definitely in Mexico, which is a new country and all the others will be next fall or next spring.

Holly Guthrie (Janney Montgomery Scott): How the international revenue and the operating income are recognized?

Walter Parks: These are licensee agreements where they buy from us at a margin below our retail, but with essentially no cost, so a better flow through.