Operator
Thank you. Our next question is from the line of Richard Jaffe. Please state your company name followed by your question.
Richard Jaffe – Stifel Nicolaus & Co.
Thank you. It’s Richard Jaffe at Stifel Nicolaus. Good evening guys. Good job on expenses. I’m wondering what your visibility is on two levels, one is the guy coming back in to refresh his wardrobe and obviously you’re getting some of that business through the BOGO and then visibility into the second quarter and the wedding reservations, I guess they’d be called, for tuxedos, how you think that business could play out, the tuxedo inventories up significantly, do you expect the tuxedo rentals to be up a commiserate amount?
George A. Zimmer
Well, we are continuing to run tuxedo rental commercials on television. Neill, do you have the exact numbers on advance reservations?
Neill P. Davis
I do but the numbers continue to build week to week, month to month. Richard, what I would suggest for you is that the 7% to 9% increase in our comps for the rentals business for the first half underlying that is some visibility into the number and we feel very confident in that at this junction.
Richard Jaffe – Stifel Nicolaus & Co.
Okay and other than the BOGO any sense of guys needing that new interview suit and coming back in? Any sense of trend since the quarter ended?
George A. Zimmer
No, it’s all give me a deal that’s exceptional and I’ll consider spending some money.
Operator
Thank you. Our next question is from the line of Janet Kloppenburg. Please state your company name followed by your question.
Janet Kloppenburg – JJK Research
Hi. Janet Kloppenburg, JJK Research. Hi, everybody. George, maybe you could help us understand what’s happening on the gross margin line in terms of your negotiation with vendors? I know that you expect the rate of decline of gross margin to moderate as we move to the back half. I’m wondering if given the environment and I think a recent bankruptcy filing by one of your competitors I’m wondering if you’re able to secure lower prices on like product or if you’re changing your mix and you’re selling inexpensive suits but perhaps the quality level is going down.
Maybe we could learn a little bit more about what the expectations for a normalized gross margin rate might be going forward?
George A. Zimmer
Thank you Janet. The quality is not going down. If anything the quality is going up. We’d rather not mention brand names specifically on the call but we have a suit now in our New York stores that we know would be very attractive to people in the financial community and we are always looking for brands and have reason to believe that in difficult business conditions our chances improve to get additional brands. So, we are not moving down in quality. If anything we’re going to move up in quality and try to promote our everyday low price as we’re $100 less than the regular price at a department store and we throw in a second suit for free.
Janet Kloppenburg – JJK Research |
