However, beginning in fall you will see Ann Taylor’s product offering, marketing and in-store environment begin to evolve to a far more modern, relevant, and compelling point of view. We believe existing and new clients will respond favorably to the brand’s new direction.

In terms of inventory, we ended the quarter with total inventory per square foot down 16% driven by Ann Taylor which was down 28%. In addition, our balance sheet and cash position remained very strong. Mike will take you through the details of our financials in a few moments.

Turning now to the brands. Starting with Ann Taylor. As we have discussed previously this division’s performance reflects both external factors as well as internal ones. From an external perspective we continue to be challenged by the ongoing major market disruption in the aspirational luxury market for women’s apparel, particularly apparel for professional working women as our client continues to pull back significantly on apparel purchases for herself.

From an internal perspective the product assortment was not compelling or relevant for her and the aesthetic and inventory buy for the quarter did not support as cohesive a story in-store as we would have liked.

Notwithstanding these issues, I do want to point to a few encouraging factors underneath the disappointing top line performance.

First, we did intentionally limit our promotional or markdown sales by entering the quarter with cleaner inventories than we have historically and by focusing on more full priced, higher margin sales. In fact, our markdown business was down more than 50% which led to a higher gross margin rate versus year ago for the division.

We remained highly focused on inventory disciplines and gross margin improvement as we worked towards greater full price integrity for this brand. In addition, when we did present compelling product it consistently performed well and oversold our expectations at full price. This does provide us important feedback on our clients’ full price appetite for compelling fashion and her Call to Action to the brand to offer a more relevant and unique fashion assortment.

And finally, our traffic significantly outperformed our comps. The good news is that we have a loyal client who wants Ann Taylor to win and who willingly returns to shop the brand.

We believe that with a more exciting and stylish assortment we can convert our existing client with greater success and capture new clients.

Looking ahead to the second quarter for Ann Taylor, we remain highly focused on inventory management and on maximizing the more modern fashionable elements of the assortment, while we continue to work our way through the pipeline of prior product.

On a positive note as part of our May store set, we did fast track a handful of items that are indicative of the direction we are taking the brand in fall. Those pieces sold out in the majority of our fleet within a couple of weeks and give us greater confidence in the assortment we have for the upcoming season.

In addition we recently hosted a fall fashion preview for the fashion community for both Ann Taylor and LOFT and the response was very encouraging. I would note that we have again positioned our inventories conservatively for fall as we test and learn our way to a more robust performance in the Ann Taylor division and invest behind success rather than ahead of it.

Now turning to LOFT, LOFT entered the first quarter with an exceptionally clean inventory position and purchased inventories for the first quarter very conservatively. This limited sales of markdown goods and supported our strategy to maximize gross margin while minimizing risk. As a result, our non-full price selling was down nearly 50% but our full price selling was much stronger for the quarter.

Importantly, LOFT’s overall comp performance improved as the quarter progressed as our full price inventory built. In addition improved product assortments coupled with a positive response to the value that LOFT represents positively impact the division’s results.

With in-store inventory per square foot at LOFT down 23% at the end of the first quarter, we are well positioned to support a focused, strategic promotional stance for the second quarter. We expect this will enable LOFT to again achieve a strong gross margin rate in Q2.

Turning to products, during the first quarter our client reinforced for us how important it is that we offer affordable fashion that is both feminine and casual. Our knit tops, casual bottoms, and dresses performed well while we experienced softness in the refined and relaxed separates business.

In knits, results were strongest in items that we added embellishment or feminine details to and fashion bodies and great colors. Our basics business in Ts and camis also performed well and will continue to be a growth opportunity for us each season as we infuse these styles with novelty trims and fashion details.

Casual bottoms turned in strong results for the quarter with successes in cotton pants and denim where she responded positively to our variety of lengths across crop, capris, and shorts. In dresses we experienced success in our weekend category where she found our opening price points compelling and where our color offering was very well accepted.

On the other hand, the work component of the business was challenging in the first quarter on a year-over-year basis. Although our inventory was positioned more conservatively than in years past, there remains an opportunity to further downplay this category in the future while adding more versatility into the assortment.

Specifically, in separates we are updating our fabrications and modernizing our silhouettes and styling. We continue to make great progress in reducing the number of SKUs that we offer so that our assortments are more cohesive and focused.