Barbara Wyckoff (Buckingham Research): What’s the latest approach to collection?
Trudy Sullivan: We are still testing it. We believe there’s a room in our assortment, because we want to have the peak of the pyramid. We haven’t expanded it’s footprint at the store level, yet we’ve gone back.
Our approach on collection is that it truly is 30% to 50% more expensive than core, but stylistically it relates to the core offer. So, it would allow our customer if she wanted to buy a component of collection and match it back to something that might be less expensive than core.
We think there is room for it, but we are going to walk before we run. We are very pleased with how it looks as we go forward into spring summer and we’ll stay tuned. Once we think we have refined our approach, we believe we could double the number of collection stores, but we are not going to do that until we have some more proof of the approach that we are taking.
Dana Telsey (Telsey Advisory Group): Can you talk a little bit about sourcing; what you’re seeing in terms of sourcing costs; how that’s changed and also opportunities for IMU given the current assortment?
Trudy Sullivan: We have significant sourcing opportunity and IMU is right up there. So, we’ve got some very aggressive objectives for IMU. For spring season alone we’re looking at greater than 300 basis points improvement in IMU over the last year as we just start to implement our supply chain strategy.
We do have some significant opportunities from several areas: one is country migration, so that we are actually handling that in a much more effective way; one is that the whole competitive bidding and negotiation skill set that we’re frankly under leveraged it as a company and then thirdly, leveraging our vendors buying power with our mills and so, we see tremendous opportunity in our supply chain.
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