Mark Montagna (CL King & Associates): So there’s not, is there a big chunk of expense savings or is it a lot of singles as opposed to triples and home runs?
James Delfs: Most of its singles and a few doubles thrown in.
Mark Montagna (CL King & Associates): You mentioned marketing, and I’m just trying to understand how the marketing may change, are you going for a different message in terms of the, with the marketing that you’re going to do this fall?
Glori Katz: There’s really a couple of things that we’re looking at. First of all we have to make sure we’re spending our dollars as efficiently as possible so we’ve put a lot of emphasis on looking at what we can do from a media standpoint, direct marketing being a big chunk of that. But then of course the message is key. We have a new partnership, new advertising agency partnership; they have begun to show us work that we’re hoping we can put into test even before the end of this third quarter that can have some impact in fourth quarter. Certainly the message that we come up with for third quarter would find its way into our holiday advertising and it definitely needs to communicate our value proposition very strongly as we go forward.
Mark Montagna (CL King & Associates): In terms of the branded merchandise, it sounds like you’re going to emphasize brands more, how is the mix going to change? I’m looking in terms of what percentage of merchandise was branded last year in the third quarter and what percent will be branded this year in the third quarter and perhaps even beyond that, how do you expect it to change next year?
William Moll: That is definitely something that evolves because a lot of the brands have gone away with some of the changes mainly in the apparel market so it will take about until probably this time next year that we’ll be more pleased with where we’re taking it so it’s a slow process but the goal is to be well over 50% is our long-term goal, but we will see how this bubbles up and as we said in the remarks, men’s has had more opportunity of brands and ladies, we see many more opportunities coming in in the first quarter of next year and be much more aggressive on that. So 50% and exceeding that is our goal going into next year.
Mark Montagna (CL King & Associates): Where do you stand right now?
William Moll: Men’s is actually over that number, ready-to-wear is probably in the 40 percentile number.
David Mann (Johnson Rice & Company): On the move to brands, can you give us a sense on the margin impact that that may have?
William Moll: There will not be a margin impact on that.
Linda Farthing: We’re able to buy the brands advantageously so we’ll leave it at that.
David Mann (Johnson Rice & Company): On the 10 stores you’re closing, can you give a sense on what the operating performance on those stores are?
James Delfs: Only to say that certainly the reason they’re closing is because they were not making a positive contribution.
David Mann (Johnson Rice & Company): On the marketing side, are you going to be changing the amount you’re spending in the back half versus last year and on the message, will you be putting brands more integrated into that message?
Glori Katz: We’re going to keep our spend as a percentage of sales consistent to where we’ve been so there won’t be a change there but we are looking at a message that can really hit the value proposition on all the important tenants and certainly brands will be integrated into that message.
David Mann (Johnson Rice & Company): In terms of any kind of apparel inflation what are you expecting to see given all the top bids out there?
William Moll: We definitely have seen some push up inflation for third and fourth quarters at this point in time, but it’s a constant negotiation with the marketplace to see where it ends up. But you’re seeing it out there.
David Mann (Johnson Rice & Company): So should we expect your IMU to be pared a little bit?
William Moll: I don’t believe that will be affected, we’re negotiating as best we can not to have that affected.
David Mann (Johnson Rice & Company): Given the storm coming across Florida, can you just give a sense was there any material impact on store traffic or closings?
Michael Ray: Virtually every store in Florida was impacted, we didn’t sustain any damage. We have very few closings as a result the traffic was substantially down and customers’ focus was elsewhere rather then shopping for apparel.
David Mann (Johnson Rice & Company): But in the context of the quarter should that be that meaningful?
Michael Ray: No, I don’t believe it will and we’ll know more this week as people get back out of their homes and into our stores.
What is the remaining CapEx for the rest of the year?
James Delfs: In total, we’re looking at $16 million and $19 million for the year in total.
And then with the stores that you close, are those in a particular geographic location or are those all across the board?
James Delfs: They’re generally not any specific geographic area, they are spread around.
With the linens, are you going to keep that segment in terms of your square footage allocation, do you have any plans to reduce that?
William Moll: We’re looking at reducing home in general.
Linda Farthing: And that’s been a process that’s been in place this year as we continue to see the home area declining for us, that’s been something well underway.
|
More:
