We have three more going in the ground between the end of April and the middle of May, and those will be probably 75% or 80% complete. So we are watching and learning, big discussions with customers, looking at all our metrics, including traffic, which is a key metric going forward, and so far we are pleased with the results shown.
Paul Lejuez (Credit Suisse): Is there anything unusual happening in the first quarter that is preventing more expense dollar savings?
Sabrina Simmons: We would not recommend extrapolating savings in any one quarter out to any other quarters because there are differences that we will try and point out when we get there and there is seasonality, etc.
We are now beginning to anniversary deep savings that we garnered last year. So in the first quarter of 2008 we actually saved over $90 million in the first quarter. So that is what we are beginning to anniversary.
We are making important investments in our business, so we feel committed to the Old Navy marketing campaign. We want to drive traffic, but at the same time balancing that against being really disciplined with our core expenses. And as you can see, we are still bringing expenses down overall.
The other areas of focus that don''t just show up on that SG&A line, as Glenn mentioned, include, of course, the continuation of AUC. Savings in the areas of other non-merchandise procurement, logistics, and rent and occupancy.
Paul Lejuez (Credit Suisse): With 500 plus stores and their price point, does this environment say that you should think about pulling back on some of the U.S. Banana Republic stores and close some stores?
Glenn Murphy: There are about 450 stores in North America. If we felt the model no longer had customer appeal or the segment in which it was operating, was being squeezed out, we would be looking at its economic model and wondering whether we should have less stores.
We are disappointed and the team is working on it. Every now and then you have to make some adjustments and we are willing to make them, the team is committed to getting it done.
If there are stores inside of the 450 that do not perform, we will consider closing some of the 450.
Kimberly Greenberger (Citigroup): Can you share with us how you plan to go about getting more traffic into the stores?
Glenn Murphy: We have started to get focused this fall when it became clear to us that we could be a purist and we can put phenomenal product out and push our design team and merchandising team and run great stores and do promotions when it is needed to move through inventory, or we can look at our business in a very honest way.
We have been studying it, particularly people who are new to the business, and looked to the last five years. And we have not been a company that has gone out proactively and in some brands, to different levels, with Old Navy being the first, aggressively gone after and spoken to customers and tried to get them inside the four walls of the store.
Then it is the job of the store to convert them and the quality of the product, being brand appropriate, and the work of the people who work in our stores, that is what they own in terms of conversion.
Shifting some of that marketing, put a little bit more in store into the windows, marketing vehicles that actually will get people to react positively and come into our stores, do more things that we actually buy into and plan.
Because we should not be a company that is based on promotions, we are based on moving through inventory as opposed to driving in traffic.
The last number of years anything we did promotional was based on moving through our inventory. Going forward in 2009 any investment in the gross margin, is going to be based on trying to drive in traffic.
And once we get the traffic in the door, let the stores and the product do the job of moving through the inventory. So it is a bit of a shift for us. It has taken a bit of time to make sure the right people are in place, the right accountability, the right metrics.
It is how we are going to measure ourselves in a large way next year is are we able to recapture a lot of lost customers we have had before, but also bring in new customers.
Kimberly Greenberger (Citigroup): Any idea on the timing we might see some of those new initiatives take hold?
Glenn Murphy:] Tonight you will see the beginning of it with Old Navy for sure in terms of its campaign and its communication, and it is much broader than the television.
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