Overall, we made good progress during the quarter at LOFT delivering our unique value message with more concise value messaging in our windows, and in our e-mail outreach. In this environment we believe that LOFT’s high quality at surprising prices is a key differentiator.

Let me spend a moment talking about the differentiation of the brands and how we’re positioned heading into fall. The upcoming third quarter is by far the most differentiated that Ann Taylor and LOFT have ever been. LOFT is decidedly casual emphasizing a fashionable and feminine aesthetic while Ann Taylor speaks to a more refined and sophisticated client.

This differentiation will be very apparent to you with the fall assortments which are more authoritative and highly focused on the DNA of each brand.

Before turning the call over to Mike, let me spend a moment on our factory and our Internet businesses.

Starting with factory the recessionary environment also impacted this channel with comp traffic down in the double-digits. In addition, consumer reluctance to spend was evident as most other in-store metrics were also soft which drove top line weakness for the quarter.

However the factory channel was very successful in maintaining a strong gross margin rate for the quarter.

Finally, our Internet business continued to experience healthy double-digit traffic growth for the quarter although sales were pressured by the recessionary environment as consumers were generally more selective about spending.

We are pleased that traffic growth is healthy which is a sign that our client remains engaged. We continue to view the Internet as this highly scalable and cost effective growth channel which is also a critical cost effective marketing tool.

With that let me turn it over to Mike for a review of the financial performance.

Michael J. Nicholson

Thanks Kay and good morning everyone. Today, I’ll start with a summary of results for the first quarter and then I’ll provide you with our outlook on the second quarter and the full year.

Beginning with net sales, net sales for the quarter were $426.7 million, a decline of 28% versus the $591.7 million in net sales reported in the first quarter of last year. By division net sales at Ann Taylor were $107.4 million versus $197.6 million in Q1 last year.

At LOFT, net sales were $223.2 million versus $295 million reported last year. Comp store sales for the quarter decreased 30.7% with Ann Taylor down 42.7% and LOFT down 24.2%.

Our strategy to maximize gross margin in 2009 while minimizing inventory risk involved limiting the amount of prior-year product entering the quarter and buying the first quarter very tight. This strategy was very successful in driving strong gross margin rates but it did have an impact on comp store sales results as we expected it would. We anticipate that much of this comp softness will continue in the second quarter with some improvement in trend at both brands expected in the third quarter.

Turning now to margins. As Kay mentioned we were highly focused on delivering gross margin in the first quarter. Our first quarter rate of 55.5% was 230 basis points above the 53.2% rate we reported in the first quarter of 2008, versus the 35.7% gross margin rate reported in the fourth quarter of 2008 our performance in Q1 of this year was particularly noteworthy. And all three divisions did achieve strong gross margin rates for the quarter.

Total inventory per square foot declined 16% versus year ago and in-store inventory for the quarter was also down 16%. At the Ann Taylor division, total inventory per square foot declined 28% while in-store inventory declined only 16%. This more modest in-store decline reflected a strategy shift to seasonal versus monthly product flows for a portion of the assortment that will now live throughout the season. Adjusting for this change in product flow strategy, Ann Taylor’s in-store inventory would be down about 25% to 30% for the quarter.

Now while this inventory position will likely put some pressure on the division’s gross margin rate in the second quarter we nevertheless expect the division to achieve a solid gross margin rate for Q2 and enter the third quarter cleaner than we’ve ever been from an inventory standpoint.

At LOFT, total inventory per square foot declined 16% and on an in-store basis inventory declined 23% in line with our comp store performance. For the total company we bought our inventories for the second quarter down in the 20% to 25% range which we expect to support a solid gross margin performance but below the very strong performance we achieved in the first quarter.

Turning now to SG&A. As Kay stated earlier SG&A declined $31 million versus the prior year despite a 1% increase in square footage. This decline reflects restructuring program savings and other cost reduction activities in the areas of store payroll, tenancy, and depreciation.

Turning to our restructuring program. We now expect incremental savings in 2009 to total $40 million to $45 million versus the $35 million to $40 million previously communicated. As a result, total ongoing annualized savings are now estimated at $85 million to $95 million by year end fiscal 2010.