- During a tough spring, this category is still trending nicely ahead of last year and represents significant growth opportunity and the firm is making an incremental investment in this category to create the desired impact in the stores.
- The firm is also stepping up its focus on casual sportswear, anchored by denim, which will be positioned in the front of the store starting in the month of August with a focus on new washes and novelty details in denim, merchandise back to fashion knit tops and novelty jackets.
- In addition, Dress Barn is directing marketing to reflect commitment to this business, as opening inventory in denim will be 50% greater than last year, funded through cut backs in underperforming categories.

In an effort to trade up on the assortments and appeal to a more fashion customer, the firm has added a new proprietary collection to the store, YVOS, an acronym for Your Very Own Style.

- This merchandise is more contemporary in feeling, uses better fabrications and constructions, and retails for 25% more than the core Dress Barn assortments.
- The firm is currently testing the concept for spring and are pleased with the results.
- Additionally, in wear to work, the firm is launching suit separates in 100 stores for fall based upon extensive spring tests.
- The firm successfully went live with the new Oracle retail merchandising system in July 2007 and this coming fall will be implementing the planning module followed by the allocation module later in the fiscal year.

Update on Merchandise- Maurices:

- Positive third quarter results were spurred by the continued maturation of the new initiative businesses—Plus, Wear at Work, Lounge Apparel, and Handbags which compensated for the weaker trends experienced in woven tops, shorts, and dresses.
- Disappointments included many of the more weather-influenced categories and the well-developed denim and knit classifications remain a strong foundation of the business.
- Key details in tops have crochet trends, smocking, and framing while solid layering pieces continue to be strong with solid fashion tops growing in importance.
- In bottoms, side pocket jeans as well as tailored pants were very strong throughout the quarter.

Marketing Initiatives:

- Primary initiative this quarter is to focus on driving traffic and sales and protecting market share through direct mail and in-store promotions.
- In store, bolder promotions using color and stronger messaging created greater impact on the windows and these were coupled with aggressive e-mail blasts each week highlighting promotions.
- In the fourth quarter, due to the challenging economic climate, the firm will continue to reallocate dollars to support direct mail and in-store promotions to help drive traffic and sales.
- It increased quantities of the two key direct mail pieces, Mother’s Day scratch-off postcards at 3.2 million pieces generating strong results, and the July private sale postcards at 1.7 million pieces utilizing most compelling offers and formats in order to generate the greatest response.

Real Estate:

- Dress Barn opened 16 stores in the spring season and the firm project closing 9, for a net square foot increase of 1% for the fiscal year.
- Maurices has opened 10 stores, with an additional 29 projected for the fourth quarter, giving a total of 70 new stores and 3 closings for the fiscal year, with a net square footage growth of 11%.
- This does not include 22 relocations primarily out of malls and into strip centers.

Key questions and answers from the third quarter earnings call conducted by Dress Barn Inc. (DBRN: chart) on May 28, 2008.

Mark Montagna (C. L. King and Associates ): Where do you expect inventories to be by the end of the fourth quarter then?

Armand Correia: At this point, it is really very difficult to get any visibility. Given what we have just seen in May, with particularly Dress Barn stores, we would like to be down in the low single digits with Dress Barn stores, but again if we continue to see these types of drops, it’s going to make it very difficult.

Mark Montagna (C. L. King and Associates): Do you have a margin projection for the year end for the divisions?

Armand Correia: Maurices from the operating margin standpoint coming in the range of 12.0 to 12.4 as far as percent of sales. Dress Barn division, is just slightly below 4.5% of sales to slightly above 4.5% of sales.

Steve Kernkraut (Berman Capital): What drove performance at Maurices?

Lisa Rhodes: In addition to plus size, we have introduced approximately wear at work, which is a lifestyle concept that caters more to the working woman, bank teller, etc., and it really complements all her fashion needs for going to work, and that has become a larger percentage.

We also introduced lounge apparel, and that is a combination of both comfort wear as well as this month we will be delivering our first deliveries of Yoga in that shop, and additionally we have revamped our handbag assortment introducing higher priced products, better quality, and merchandising it to complement each of the lifestyles.

Steve Kernkraut (Berman Capital): Comment on how some of the new markets you have opened stores in over the last year are tracking versus your expectation?

David Jaffe: We are very close to our expectations. Some of have been a little slower to get started, and a lot of that is simply due to our name not being known, so it’s a more of an education process.

Unknown Analyst (Raymond James): You had mentioned about the denim inventory expected to be up 50% year over year. What is the timing of that and what kind of rates are looking at?

Keith Fulsher: You are looking at the beginning of August, so versus that timeframe last year, we are going to open up with a much stronger presentation.