John Morris (Wachovia): Can you give an update on some of the management searches that are underway?
Chuck Crovitz: The search for the CEO is ongoing. It is part of the whole strategic review process and that is more of a Board issue at this level, we are staying focused on recovering the business and maximizing value for shareholders over the medium and long term and those are the only active search we have ongoing at this time.
In terms of the President of the Children''s Place, now that we are a single brand business, we just need to evaluate what the structure needs to be there and we have not landed that completely yet.
Margaret Whitfield (Sterne and Agee): What the gross margin was for the core business only in 2007 and any directional comments on what we might expect in 2008?
Sue Riley: Our gross margin in the fourth quarter was down in both businesses. We do not disclose the split; however, I can say it was down more in Disney; it was down in The Children''s Place as well. In part, as a result of the more conservative inventory management coming into 2008, we are not buying as much so we do not have to mark down as much. It is our expectation that we can increase our gross margin year on year as a result of having fewer markdowns. Time will tell; but we are buying fewer units so we expect to have lower markdowns in 2008, which should fuel the Children''s Place margin.
Margaret Whitfield (Sterne and Agee): What the base margin was in 2007 for the core business only?
Sue Riley: We have not historically split out the gross margin for Disney and Children''s Place; I can not comment on what the base was except to say that we do expect it to improve in 2008 and the margin was down in both brands in the fourth quarter; but, down more in Disney.
Chuck Crovitz: That is our target and our hope; but, this is a difficult economic environment and it is dicey to predict where our gross margins are going to go.
Margaret Whitfield (Sterne and Agee): Is the shoes part of the business a go forward test?
Jill Kronenberg: Right now we currently have about in 50 stores. It has been a business that we are learning a lot from. We are taking our learning’s and applying it to this year and are feeling good about it and feeling good about the effects it is even having on our core shoe business that are in the entire chain. Basically, it has been a year of learning for us and we are applying those learning’s going forward.
Margaret Whitfield (Sterne and Agee): You referred to the strategic review as ongoing, what additional aspects are you considering?
Chuck Crovitz: It is an ongoing review that is going on at the Board level and with our advisors and you have a big down payment on it today. It is a continuing review and we are not prepared to talk about other avenues and other aspects we are looking at right now. We are completely committed to maximizing the value for our shareholders and it is an ongoing and active part of the work of the Board and the Senior Management team here.
Margaret Whitfield (Sterne and Agee): How many stores do you think Children''s Place could ultimately have?
Chuck Crovitz: What we are focusing on right now is recovering the business and restoring it to its previous levels of profitability and productivity. Then as we get through those first couple of stages, we will need to turn toward the future and the growth opportunities and we have had several on the table. We will dust that off and take a look at it. Right now, I have to say our focus is on recovering the base business and I do not want to comment on whatever numbers of stores until we have a chance to thoroughly get into that.
Michael Shoregast (Long Acre): Shared Services should be divided more evenly based on the store count or divided more pro rata based on the store count between Disney and Children''s Place. Is there an opportunity where into 2009 you think you are being conservative and you can bring that number down below 95 million where you are guiding to right now?
Chuck Crovitz: This notion of going after our cost structure is an ongoing initiative and the reductions we are seeing in Shared Services are both a result of our decision to exit the Disney business as well as our continuing focus on getting the cost structure of the Company appropriate for our value-orientated retailer. I think it is ongoing and we are going to continue to work on those areas particularly through process improvements that will yield lower costs. We also expect for a transition period of at least that we will continue to offer services to the Disney Store chain. We have to work all of that out.
Michael Shoregast (Long Acre): Do you feel that your current borrowing capacity is sufficient or will you have to get something new?
Sue Riley: We are managing cash much more conservatively than we had in the past; we have repatriated $45 million of cash deferring store openings until the later part of this year and we have a significantly lower inventory buy year on year for back to school, which we believe is appropriate given the comps we experienced last year, the markdowns we saw last year and the economic environment that we believe we are heading into. Beyond that I have not commented and I am not going to comment at this point on the adequacy of our revolver except to say that we are managing cash much more conservatively than we had in the past.
Janet Kloppenburg (JJK Research): What the depreciation expense was for the Children''s Place business last year?
Rich Flaks: For the year it was 5 million.
Janet Kloppenburg (JJK Research): Can you talk about the third of the Disney stores that are not being taken back by Disney or not being considered to be taken back by Disney?
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