Janet Kloppenberg (JJK Research): Could you talk about the content, mark down inventory levels versus last year going into the second quarter?

Matthew McCauley: Our markdowns are down going into the second quarter. We are clean and happy with the mix of inventory. We feel comfortable with the comp guidance we have given with the inventory we have got.

Janet Kloppenberg (JJK Research): You are looking for low single digit positive comps; inventory is down 2% on a comparable basis. Do you look for inventory to continue at those levels or will it move back up to the level that the comp trend is expected to come in at?

Blair Lambert: On a per store basis inventories are flat year-over-year and we have product cost reductions we have been incurring so on a unit basis we are up on a per store basis. We are feeling good about where we are and fairly consistent with what you would expect given the comp guidance.

Janet Kloppenberg (JJK Research): Last year going into back-to-school you wanted your uniform or your basic programs to be more key item focused. Are you following that again this year?

Matthew McCauley: The big opportunities would be going after denim, backpacks, polos, woven bottoms and dresses. Those are the big categories we are continuing to go after. Since you saw a big increase last year we are anniversarying that and the big wildcard always is the in-transit because we are looking at the inventory a snapshot in time. The best way to think about this is our purchases for the selling time period going into back-to-school are down still with major investments in denim, backpacks, polos and woven bottoms.

Lorraine Maikis (Merrill Lynch): Things have been promotional around you. Are you planning any direct mail pieces or incremental marketing for the summer and fall timeframe?

Matthew McCauley: Our promotional strategy is similar to last year. As you saw in the first quarter in some cases we may have gone a couple of extra days or started earlier. That may happen in the second quarter as well. In terms of direct mail you heard me talk about earlier how we had a change in our mix between direct mail and print advertising and using call-to-actions in our print. We are flat in terms of the direct mail piece but you may see an increase in some of our other marketing like print with calls-to-action.

Lorraine Maikis (Merrill Lynch): Have you seen any evidence of your mom customers trading down within the store or even from Gymboree down to the outlet or Crazy 8?

Matthew McCauley: That is something that has come up for the last couple of years. It would make sense for that to happen. We just have not seen it happening at this stage. Not to say it will not in the future. We just have not seen it happen yet.

Marni Shapiro (Retail Tracker): You mentioned Children’s Place, Old Navy and Target all within the same commentary on Crazy 8. Could you talk about your retail real estate strategy for Crazy 8?

Matthew McCauley: We want to start with the high-volume, high traffic malls and then expand out from there. The hub and spoke type of approach where we will start with the high-volume, high traffic malls, build the brand and then expand out from there.

Marni Shapiro (Retail Tracker): You said you are selling more sizes 7-9. Are you selling more of that size because the customer is that size or because she is that age?

Matthew McCauley: We have been studying that ourselves and we have been able to assess from our customers the age we are hitting the sweet spot is that 6 and 7 and the sizes they are buying up.