Supporting our ongoing fiscal strength is our aggressive restructuring plan. Our actions over the past several quarters clearly demonstrate that we will act decisively to protect our business and position the company for success when the economy improves. The important restructuring actions we have taken to date are already generating better than expected results and they pave the way for significant additional benefits over the next two years. As you know, success in this business starts with having good products that resonate in the marketplace.

Loft’s product is better and I am confident that it will continue to improve under Gary’s leadership. For Ann Taylor, we know we have work to do but we believe in our vision and strategy and are confident that Christine and the new team will be successful. My senior leadership team is now complete and we are operating with a leaner, more efficient organization that is highly focused on achieving success.

And finally, you should know that we are approaching 2009 very realistically. That means we are reducing costs across the business and conserving cash through tight inventory buys, a dramatic reduction in capital spending, and a very conservative stock repurchase stance. These actions will ensure that we have the cash flow and liquidity to run the business during these difficult times and position our brands for success when the economy improves. With that, let’s open it up to your questions.

Question-and-Answer Session

Operator

At this time I would like to inform everyone in order to ask a question, please press “*” then the number “1” on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster. Your first question comes from Kimberly Greenberger with Citigroup.

Kimberly Greenberger – Citigroup

Thank you. Good morning. Mike, forgive me if I missed this, but did you give specific inventory guidance for the end of the fourth quarter this year?

Michael J. Nicholson

Kimberly, we did not provide specific guidance, just a quickly recap in terms of where we landed for the third quarter at a total company level. Our total inventory was down 10%. Our in-store inventory was down 13%. When I look at the inventory by business unit, Ann Taylor in total was down 15; in-store inventory was down 22% and then from a composition perspective our carryover inventory at Ann year on year in-store was actually down 30%.

At Loft, our total in-store inventory was down 14%, at the total division level down 12 and again from a composition perspective carryover, it was down 20%. What I will say is that we are planning to aggressively move through our receipts during the fourth quarter and position us quite frankly in even better position than we are today, moving into the first quarter of next year.

Kimberly Greenberger – Citigroup

So it sounds like you were able to be very proactive with your spring deliveries. Did you have a better opportunity to cut the first quarter of deliveries or the second quarter? And when you say you’re buying inventory for spring in line with current sales trends, would that be in line with the comp trend in the third quarter or sort of in line with the weaker trends that you saw in September and October?

Michael J. Nicholson

So, in terms of first quarter, second quarter we were successful in affecting the receipt plan for both the first quarter and the second quarter, and in terms of the trend that we’re buying too, we were able to successfully execute a receipt plan to support the trend that we experienced in the back half of October. And again, from a comp perspective as I think about the trend of the business and the comp store performance, beginning of quarter to end of quarter, I sort of think about it in terms of 5 comp points to the plus and minus side just to give you a perspective to the degree that we’re buying spring.

Katherine Lawther Krill

Also Kimberly, we had left money open for the first quarter so we were able to affect that with absolutely no liabilities and we just bought second quarter a few weeks ago and we have not yet bought the back half of the year and will not be buying third quarter until the beginning of February. So we feel like we’re going to be able to read the consumer mindset through the fourth quarter and be a lot smarter as we go into the back part of the year.

Kimberly Greenberger – Citigroup

Great. That’s very encouraging. Thank you and good luck here.

Katherine Lawther Krill