Okay and when you do that, your gross margin I guess on a permanent basis will decline but then your SG&A costs are also coming down excluding marketing. Is that how we should think about the business model going forward, George?
George A. Zimmer
I would say so, right. I think that the probability is that that will occur.
Operator
Thank you. Our next question is from the line of David Mann. Please state your company name followed by your question.
David Mann – Johnson Rice & Company, L.L.C.
Yes, thank you, Johnson Rice. In terms of the standalone tux stores, you’re talking about rebranding them and if I remember correctly you ran a test and it sounds like that went well. Can you talk a little bit more about how those stores did in the test and the performance of regular merchandise being sold in those stores?
George A. Zimmer
Well, I would say that the test results were good but not great, better than fair. It was the slowest time of the year for the tuxedo rentals as you heard our fourth quarter total rental business was about $35 million. So, it’s a very small traffic piece, but the average store did about $1,000 a week in retail product which extrapolates depending on the math you use to $50,000 a year or more if you assume that you’ll do more based on busier seasonality. It also was incomplete in merchandise so that we really do believe that the target of $100,000 a store is a realistic target.
David Mann – Johnson Rice & Company, L.L.C.
My follow up would relate to the bankruptcy of S&K. Can you give a sense on how those closings have impacted you if at all and what kind of market share gain, how much of their sales would you expect to capture?
George A. Zimmer
Unfortunately, the stores that they closed were doing individually very little business so it’s very hard in a short period of time to notice a significant difference. Stepping back we don’t know exactly what they’ll end up with in reorganization or if there will be any reorganization but we do believe that between K&G and Men''s Wearhouse we would get more of the S&K business than anybody else, dramatically more.
Operator
Thank you. Our next question is from the line of Betty Chen. Please state your company name followed by your question.
Betty Chen – Wedbush Morgan Securities
Thank you. Good afternoon everyone. Betty Chen with Wedbush Morgan. I was wondering, Neill, if you can give us a sense of how much the marketing budget could increase in the first half and if we should use that as a barometer for the back half of the year? Then in regard to the SG&A cuts it sounds like a lot of these are benefits that we should see throughout the year. Is it fair to think about some of the cuts you’ve alluded to you in the first half for SG&A to be a number that we could carry into the back half as well? Thanks.
Neill P. Davis
On the marketing spend it will be a single digit number. As we move into the first half of the year we’ll be doing a lot of things that are new and the cadence at which we will do those may be different but I think thinking in terms of a single digit number would be appropriate and helpful for you in your modeling. As it relates to back half of the year spending we would realize the same rate of reduction at that timeframe as the first half. I would tell you that it will be less as we begin to anniversary clearly the fourth quarter and quite frankly we’ll assess our results of the business from the first half of the year and then make some decisions as to what might or might not be done on the back half. But clearly where we stand today it will be at a less of a run rate reduction in the back half than the first half and it’s because we begin to anniversary that.
Operator |
