Mike Koppel: In terms of the fourth quarter, the majority of the positive leverage we got was from the benefit. It was a combination of the fourth quarter last year, which was very robust where we saw very high comp sales and we saw a steep appreciation in the stock price. This year, obviously, with the softening business, we didn''t have the same costs, and compared to last year, it was a fairly significantly spread. Hence, most of the leverage partially offset by the bad debt was a result of that benefit cost.
Jennifer Black (Jennifer Black & Associates): How you''re doing as far as fixing brass plum, petites and cosmetics and what we should expect throughout this next year?
Pete Nordstrom: Our brass plum business started to improve some what relatively from where it was at. In the past 18 months or so, it''s been relatively challenged. We''ve made some progress there, and I give a lot of credit to our merchandising team who have added to do a real sharp job editing the buy to the most compelling stuff. It seems obvious, but when business is tough like that, they were forced to take a good hard look at the business. Relatively that has started to improve some petites. Cosmetics has been performing right near the company average as well. I wouldn''t say it''s done relatively poorly. I mean it''s kind of riding the same wave that the entire company is.
Jennifer Black (Jennifer Black & Associates): Can you talk about what your gift card trends were over this last year?
Mike Koppel: We saw in the fourth quarter an increase of over 10% in both purchases and redemptions in gift cards. That was a business that definitely continues to help us especially through the holiday season.
Michelle Clark (Morgan Stanley): Where do you expect inventories to be on a comp store basis at the end of the first quarter and then at the end of fiscal year 2008?
Mike Koppel: In terms of inventory I am not going to quite break it out by quarter, but our assumption is that our inventory levels on a comp basis should be relatively flat. Obviously our goal is always to continue to try to improve our turns.
Michelle Clark (Morgan Stanley): What are we assuming in terms of receivables growth in 2008?
Mike Koppel: The current assumption in the model is a high single to low double digit growth rate in the receivables.
Barbara Wyckoff (Buckingham Research Group): How should we be looking at preopening expense by store, and by month, what''s the average per store?
Mike Koppel: For the year, the total preopening expenses are roughly in the range of $13 million to $14 million, and they vary by store. We have a predominant amount in the first quarter, as we have four stores opening. They will be roughly ratably based on the number of stores opened by quarter.
Barbara Wyckoff (Buckingham Research Group): Do you anticipate any glitches from consolidation of the inventory in Direct and the Full-Line stores?
Blake Nordstrom: I don''t know if consolidation is the right word. It''s more that we have the ability to efficiently have our salespeople access. We''re not physically moving the inventory from channel to channel, we are breaking down any barriers that might have been there, so that our people can service their customers better.
Liz Dunn (Thomas Weisel): On return on invested capital, can you provide an update on where you finished the year and what your outlook is for 2008?
Mike Koppel: While we haven''t published our final number, we finished the year over 19% in return on invested capital. Our expectations going forward, specially during this growth period of 2008 and somewhat beyond that, that those ranges will come down roughly in the 16% to 18% range, primarily due to the increase in the asset base range and the slower sales volume. For long term target, we''re still looking for the upwards 18% to 20%.
Liz Dunn (Thomas Weisel): Is there any concern about retention, given the fact that compensation has declined significantly with incentive compensation being a large proportion of how people are compensated throughout the organization?
Blake Nordstrom: When we made those comments about compensation, that''s for total company and so our best performers through out the company are still receiving incentive based type compensation. We wanted to try to share with all of you that it has flexibility to it and it''s not a fixed cost and we''re able to adjust accordingly. Certainly our senior management team is accountable for total company performance, but we think that the incentive plan does continue to reward our best performers and we haven''t, I mean at this early date, had any feedback or seen any cases of our folks hurting morale or their ability to reach or exceed their goals.
Richard Jaffe (Stifel Nicolaus): In the third quarter you talked about vendor allowances and the positive impact that had in the third quarter. Can you comment on how this year versus last year the vendor allowances shaped up, whether either specifically or qualitatively if you found them a more important factor in your earnings?
Mike Koppel: We did perform slightly better in terms of absolute vendor allowances year-over-year, but obviously with the increased mark downs, it wasn''t like there was a net improvement in the margin, as a result. But coming out of the third quarter, we did feel like we had some timing difference, but our merchants were able to do very credible job in been able to get their fair amount of dollars in the market.
Dana Telsey (Telsey Advisory Group): Can you talk a little bit about marketing spend for next year with the new store openings and also with some of your growth initiatives like Rack and the multi-channel business? What are the plans there, given the current environment?
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