Yes, I think it has been pretty consistent when we’ve been at conferences or in broader discussions. I think all of us retailers are seeing kind of a consistent approach where in the A and B locations, top tier malls there’s not been a lot of flexibility in terms of negotiations because quite frankly those properties are so successful that there’s just not a lot of willingness on behalf of the landlords to bend too much.
There are more discussions on the lower tier stores where certainly that would be where some of our closures are coming from, that would be where we might need different structures to get to better levels of profitability that make a store more sustainable and we are having better conversations, more thorough conversations with our landlord partners in that regard.
Sean Naughton – Piper Jaffray & Co.
Okay, that’s helpful. And then in terms of the comp trends for Q4, was there any difference between outlet and full price or where they relatively consistent?
Michael L. Henry
They were relatively consistent with each other. It was tough across the board and certainly we were very, very promotional in all of our stores as we were just trying to get through inventory predominately.
Sean Naughton – Piper Jaffray & Co.
And then the mix of product within some of these lower tier mall locations, the value stores as you’re calling them, is there anything different in those stores in terms of the mix of product or is it similar to what you guys have in the full price locations or the higher price locations?
Sally Frame Kasaks
Very similar, Sean, very similar at the margin, there may be a little more T-shirt business in some than others depending upon locations but the mix is very similar.
Sean Naughton – Piper Jaffray & Co.
Okay and then lastly on the sourcing we have heard obviously things, commodity prices going down, and then gas obviously going down, is there anything on that front where you are able to engineer products to lower opening price points to maintain some of the margins?
Sally Frame Kasaks
Could you just repeat the last part of that? I wasn’t --
Sean Naughton – Piper Jaffray & Co.
Oh, if price compression is going to happen at retail, are there opportunities where you continue to work with vendors in order to help maintain margin? I understand the inventory liquidation and the desire to get down for Q4 and why the margin was hit then but are there opportunities moving forward there?
Sally Frame Kasaks
We have probably been finding more flexibility on our direct sourcing capability than the brand, that’s just sort of the nature of things so there’s always opportunity to work with our brands but I think our direct sourcing is clearly providing greater flexibility and as we’ve gotten better, particularly areas like denim and those areas which we really run our own brands and we have seen some movement on that. We’ll just have to play that through as the season goes on. Don’t forget that a lot of our orders are placed sort of middle of last fall and a lot of these prices weren’t dropping then so it’s sort of a month-by-month kind of evaluation.
Sean Naughton – Piper Jaffray & Co.
Understood. Best of luck this year. |