Kent Kleeberger: I can speak to that with respect to new store performance, In White House | Black Market we are north of $500 a square foot and in Chico’s we are south of that number on new stores. They are the bigger square footage stores and expanded.
Michelle Tan (Goldman Sachs): What is the longer term strategy at White House | Black Market from a price and IMU standpoint?
Donna Noce Colaco: Our retails have gone up as we approach the fall season with the elevation of our fabrications on the quality level, the make of the garments, somewhere in the vicinity of about 7% or 8%. We do not anticipate it going any higher then that. From an IMU perspective as we were repositioning the business we are absolutely not getting the benefit or economies of scale in IMU right now. Again that will begin to level itself out as we get into 2009. We were in catch-up mode and things are beginning to level set now where we can get out there and we can research and negotiate, continue to put more product on both so we see the IMU gains happening in 2009 and retail staying about where they are now.
Michelle Tan (Goldman Sachs): Where is profitability at White House | Black Market versus Chico’s now?
Kent Kleeberger: We do not give that information out.
Brian Tunick (JP Morgan): Looking at some of the older Chico’s stores that have been expanded the past couple of years, where you think average store volumes or sales productivity will bottom?
Scott Edmonds: When I look at the performance of Chico’s in fourth and first quarter I believe that that is the bottom of the trough.
Brian Tunick (JP Morgan): Will Soma be able to breakeven this year and how far away are the four wall margins at Soma before you think about making a bigger real estate push?
Scott Edmonds: We do not believe that we are going to get to a four wall breakeven profit this year. We still think that that is somewhere in the future but the leverage on the store expenses, the leverage across the board as the volume ramps up is attractive. We think that we will get there.
Lorraine Maikis (Merrill Lynch): Could you give an update on the bonus structure for field associates?
Kent Kleeberger: There is anywhere from say $2 million to $4 million but it is a change in mindset to have people start thinking about not just in the bonus but also in the field payroll about taking a look at sales per associate hours. It is all about productivity and that is what we are trying to focus on.
Robin Murchison (SunTrust Robinson Humphrey): When you commented about SG&A and occupancy you thought that it should be flat to down. Does that consider the impact of minimum wage?
Kent Kleeberger: Yes, it does. I would like to think that the minimum wage because of the nature of our associates both in the distribution center as well as a good portion of our field associates already make more then the minimum wage. We are more heavily weighted to our full time versus part time in the field so yes it does take into consideration but the impact of which is nominal.
Robin Murchison (SunTrust Robinson Humphrey): Is there differentiation you want to make in terms of performance in those four states; Florida, California, Arizona and Nevada?
Kent Kleeberger: We look at our stores on regions and I would say that the west coast which would encompass California and Nevada is one of the lower performing regions for Chico’s. It is not a huge gap but it is underperforming on at least the west part of the United States. Florida I have had discussions with a number of other retailers that the Florida for a number of others is in the tank. I do not think our Florida performance is all that different from the rest of the areas of the country. It was that way I think earlier in the year when I first looked at it but I do not see a noticeable difference presently.
Robin Murchison (SunTrust Robinson Humphrey): The women, the models are thicker then they have been in the past and I presume that this is based on your earlier comments about the reception to the catalogue merchandise over the past three months. Could you comment on that?
Scott Edmonds: If you look back at the fall holiday campaign, anything would be heavier and wider.
Michele Cloutier: Just the level set, the size of these models are an eight so if we consider that to be girth I do not think that is reflective of the consumer today and not our customer. So we are pleased with the size of the women and the way they look in our clothes because it is much more reflective of who we are targeting.
Scott Edmonds: We were more impacted in the White House | Black Market brand and then in the month of August, tropical storm Fay, was the most famous tourist we had in Florida; kept coming and visiting and has cost us business and I am sure on the monthly release we will speak to dollar volumes what that storm has cost us.
|
More:
