Martyn Redgrave: It is difficult to estimate the exact impact on demand and sales because it is hard to say what the customer might have done if we had not the issues that we had. But we have said that we estimate that the total of all of the extra costs of running the center and the disruption to the business was in the range of approximately $80 million in operating income impact in the fall of 2007.
Paul (Credit Suisse): How about between the third and fourth quarter?
Martyn Redgrave: We do not have that broken out in any specific way.
Paul (Credit Suisse): How do you view the maturity of the Direct business?
Sharen Turney: The international business today is about 10%, heavily in Canada and then throughout the world. Although the Direct business is $1.5 billion, it is the fastest growing channel. We will continue to see growth out of that channel. What you are going to see is within the catalog business. We will not mail as many catalogs or pages. It will still be a heavily integrated web-based business. The community piece is continuing to build and how do you play within the community, which is a new marketing target for us. I think also how do you think about step size, like VS - you know we have VSPink.com and how we are linking that back to the mother ship, and there is some exciting things there. We started to test mobile commerce, and it is just beginning touching in the water so, it may not be a great experience but you get on your mobile phone and you can place orders and through Catalog Quick Orders. It is amazing how many people have already responded to that test. You are starting to see a lot of that in Japan. As our technology and zones continue to upgrade in the United States, I still think that there is some interesting opportunities there.
Martyn Redgrave: We are anticipating disruption costs. We are incurring disruption costs in the spring of 2008. We are estimating those to be in the range of $25 to $35 million in the spring of 2008, which would not have been in the spring of 2007 because we did not open the center until the fall. For the fall of 2008, we are expecting the center to be stabilized. We are continuing to incur higher costs from a productivity perspective, so we are estimating a $10 to $15 million range of what we call out of the ordinary costs.
Lauren Levitan (Cowen and Company): Could you give an update on operating margin targets for the brands, both in the near term with some of the headwinds you are facing in terms of traffic as well as some of the specific brand initiatives, and then longer term?
Amie Preston: We do not provide guidance down to the brand or segment detail.
Stuart Burgdoerfer: For Limited Brands, Inc., we would expect over the next two to three years to improve operating margins significantly. We have run at about a 10% to 11% operating margin historically with the apparel business in those figures. We as a management team believe that there are several hundred basis points of upside to that Limited Brands, Inc. operating margin rate over the next several years. That is how we are working it, because otherwise you have got to get into discussions of how we are allocating corporate overhead and lots of different things. What we are focused on is driving operating margin improvement for Limited Brands, Inc. We think there are several hundred basis points of opportunity over the next two to three years.
Jennifer Black (Jennifer Black & Associates): Could you talk about your training program at Victoria''s Secret for bra fitting?
Sharen Turney: We are in the process of changing how we are training our specialists. Years ago we did have a training program. We got off of that. We are reintroducing, under the headlines of bra sorting, a robust training program, going to the University of Victoria''s Secret. They will only be bra specialists, and it will not just be the one person in the fitting room that is trained. The entire store will be trained. There will be different levels of graduation. This is something new, and we have piloted this program. It is now fully implemented in two stores today, which is Houston Galleria and Tuttle. We have great training materials. We also have materials for the customer.
Todd Slater (Lazard Capital Markets): Do you see opportunities for all the businesses, VS and even the sub-brands, Pink, Beauty, and also BBW in international?
Martyn Redgrave: In terms of the order of priority on the brands, the three that we are most focused on would be Victoria''s Secret, Pink and BBW. We do think there is an opportunity for Pink as a freestanding brand outside of the United States. It is a different assortment model, a different sizing model, and Les is engaged with us in thinking that through. Canada is our number one priority, both in terms of continuing to grow the La Senza business and its international franchise business as well as introducing BBW, and we are continuing to think from a 2009 perspective about Pink and Victoria''s Secret.
Todd Slater (Lazard Capital Markets): Outside of Canada, what other geographies are you targeting and most excited about in the near term?
Martyn Redgrave: Beyond Canada, the key priority for us and for me in particular has been to get a couple of partners on board who have what been there, done that experience in the rest of the world and in the product categories that we specialize in. Martin Waters, in terms of personal care and beauty. We have an executive, Sandra Heppinheimer, who runs our Victoria''s Secret Beauty business outside the United States who has been on board for a number of years but has a deep beauty background and experience around the world. Now Ralph Jannsen, who has a deep experience in intimate apparel around the world, Martin being British and Ralph German. We are building a team that has the experience that gives us the credibility in terms of taking our brands to the rest of the world. The geographic priorities are hard for me to comment. The rest of the world sets itself up as developed markets like Japan and the U.K., Continental Europe, and less developed from a competitive perspective markets, like the Middle East, Hong Kong, Singapore, China, Mexico, Brazil.
John Morris (Wachovia Capital Markets, LLC): What direct mail marketing promotions on a year-over-year basis in terms of mailings and planned promotional level looked like this spring versus last year and what are you planning for the fall season in that regard?
Diane Neal: Overall promotional strategy for the spring has been about flat to last year. Discount started out shallower in the beginning of the first quarter. We got deeper as we got to Mother''s Day. The CRM activity, the amount of mailings is down to last year but we hit a higher segment of return customers, so we feel the overall traffic generated is from that. It is probably flat to last year. It would be similar as we get into the fall. However, we are looking at opportunities for mailings to new customers as well as some of our lost customers, so we are looking at some other opportunities with our CRM activity.
John Morris (Wachovia Capital Markets, LLC): You put a lot of focus on newness. What are the numbers of A and B launches this year versus last year?
Diane Neal: We have got about double the amount of newness in fall of 2008 versus fall of 2007, not only in product launches but some of the fashion accessories that we are buying.
Dana Telsey (Telsey Advisory Group): Can you talk about the gross margin and the opportunity given that some of the inventory reductions are being anniversaried?