Brian Tunick (JP Morgan): Can you give us a little more color on the metrics behind the comp decline at core TMW?
Neill Davis: Relative to the composition and character of our same store sales rates of change, it continued to be led by traffic however I will tell you that our average ticket is also, has been under pressure for this year.
But within average ticket it relates primarily to units per transaction. It’s just reflective of our customer becoming slightly more conservative in their buying when they do come into the store.
Instead of multiple items, multiple shirts, multiple ties, they are narrowing it down so they are being a little more conservative and that’s being manifested in terms of the lower units sold per transaction.
However it continues to be predominantly a traffic issue. As it relates to the questions concerning leads, are we getting business shifting from MW Tux to the Men’s Wearhouse, absolutely.
We have a unique opportunity right now in terms of offering our customers a choice when we do begin to make calls from our centralized call center in Houston on those leads across 1,000 touch points in this country as opposed to previous choices; 500.
David Mann (Johnson Rice & Company): In terms of the second quarter semi annual sale, can you just review the performance?
George Zimmer: The performance was excellent at K&G and Moores and mediocre at Men’s Wearhouse. We made a mistake in our Men’s Wearhouse television and used an announcer’s voice instead of mine. That will not happen again.
Tommy Halloran (Unspecified Company): Could you give us a little more detail on your capital spending plans going forward and what portion of that you feel is absolutely mandatory to maintain your competitive position?
Neill Davis: Components of the $70 million-ish range that we have for this year, about two-thirds of it is store related and the balance is technology and distribution center related.
I would offer to you an estimate of somewhere in the $25 million to $35 million range that needs to be spent on an ongoing basis either to continue to upgrade our stores, maintain a fresh brand and perspective for our customers as also in terms of upgrading and enhancing and changing our technology platform and distribution centers as necessary.
Janet Kloppenburg (JJK Research): Could you talk a bit about Canada and the currency discrepancy now going on?
Neill Davis: The same store sales forecast is on a Canadian dollar basis so it’s not being impacted by the currency. It’s the translation to US dollars that’s impacting our numbers. It’s only a translation affect, it’s not a cash flow affect.
George Zimmer: In terms of the competition, we only hear through the grapevine but Macy’s overall business is not good and their men’s business is worse then their overall business.
We know that there’s at least one large specialty store chain that is having trouble and it does not surprise us because whenever we go through these economic downturns there is a shake out in consolidation that occurs in 2009 and 2010.
Betty Chen (Wedbush Morgan Securities): Could you give us a little bit more information about the rental to retail conversion?
George Zimmer: The marketing spend tracks our sales, its reasonable to expect that it will go down in dollars slightly over the second half of the year and the mix is relatively stable.
We are continuing to be more and more excited with internet advertising which comes out of other electronic advertising. And on the R to R, it runs around 13% and that really is why we are making a whole new strategy to go after the millennials because we think that that number can be as high as 1005 if we get it right.
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