Michael L. Henry
Let’s see -- I’ll start with the first thing; the price has come down, since the original communication, the sales actually came down twice. The market conditions have continued to deteriorate and over time the price has come down two different times. The purchase price is now at $26.5 million. The first time we announced anything about entering into negotiations, it was at $35 million, so that’s the difference that you see. We continue to work very closely with the buyer at this stage. We do expect the sale of the Anaheim distribution center to close any day now. I’ve had a series of communications every day over the last series of 10 days to two weeks that everything seems to indicate we are moving forward towards getting escrow funded and getting that transaction closed and we do expect that to happen any day now.
Liz Dunn - Thomas Weisel Partners
Okay, great and then my second question just relates to the comp trend that you’ve seen in the apparel business. You know, all year long your apparel business has been doing quite well but can you give us a sense of how much of that is just you are buying deeper in apparel and sort of distorting the investment? So how much I guess has the sales trend been grown faster than the buy-in I guess is the -- I don’t know if I’m communicating this as well as I should but do you know what I’m asking, like as a percent of stock on the floor, is your sell-through up on apparel?
Sally Frame Kasaks
I’ll answer that -- in some categories it is, and some it isn''t but we’ve also made clearly a change in shift in the product and we have funded denim much more heavily than we have in the past, both in young men’s and juniors. So yes, we distorted denim, which was appropriate. Sitting here today, we could have used a few, you know, some less units but that was a deliberate effort to get us into the denim business, which has been very much a business driver in the company.
I think looking back in retrospect, we probably did not anticipate August being as difficult as it was, which turned out to be the beginning of whatever is happening now, and we were a little bit blind-sided on some of the key items in tops, frankly, as well as just total inventory units in some of the denim business, but we have been adjusting our inventories constantly to get it more aligned with the weeks of supply that we would want to run, which is where we are today. But we deliberately distorted some categories to ensure that we got into the businesses, particularly as we were exiting particularly footwear and reducing our dependencies on accessories. And we are pretty much where we would want to be -- a little high on inventory but from a business point of view, pretty much where we’d want to be.
Liz Dunn - Thomas Weisel Partners
But if we look through the third quarter, I mean, are your units up as much as your comp I guess is the simple way to ask the question.
Sally Frame Kasaks
But I think it depends on the category, Liz. I mean, I’m not going to go class by class by class but certainly -- but we have also seen though that in some cases when we’ve gotten a little more promotional on some categories, we’ve seen traffic build, we’ve seen transactions up, so there have been a number of moving parts on this. Would I like to have a little bit less denim sitting here today? Yes. On the other hand, I don’t think it’s as much a risk to the business than maybe some other product categories. I think the other issue was in our business also, we went out, we did find the consumer was much more value-priced oriented and we went out with, for example, the fleece in young men’s at $39.50. It’s a DC, a solid fleece hoodie and what we saw in August, which caused us to adjust some thinking, is where last year we were selling our heat fleece hoodies at $68 and $78, this year it seemed to be somewhere around $40 was the sweet spot, so we’ve had to adapt and adjust. So, it’s hard to answer your question with yes, we have absolutely the right stock to sales by category but we are moving through it and I think we do have a better understanding of what the center of gravity is in terms of how much denim we need going forward, as well as in some of these other categories.
Liz Dunn - Thomas Weisel Partners
Okay, great, thanks. Good luck.
Sally Frame Kasaks
Thank you.
Michael L. Henry
Thank you.
Operator
Your next question comes from Betty Chen of Wedbush Morgan.
Betty Chen - Wedbush Morgan Securities |
