In terms of restructuring program costs, we continue to anticipate total costs for fiscal 2009 to be approximately $5 million. First quarter pre-tax restructuring costs were minimal at less than $200,000. The net income impact was less then $0.01 per share. Excluding restructuring, we reported an operating loss of $2.5 million during the quarter compared to operating income of $44.9 million last year.

On a same basis, we reported a first quarter net loss of $2.2 million or $0.04 per diluted share compared with net income of $28.2 million or $0.47 per share in the prior year. Weighted average diluted shares outstanding for the quarter declined 5.4% to 56.6 million shares versus the 59.8 million shares in the first quarter of 2008.

Our effective tax rate for the quarter was 28.2% versus 37.8% in the first quarter of last year. This decrease primarily reflected the impact of the minimal net loss this year versus a period of substantial income last year.

Depreciation and amortization in the first quarter totaled approximately $27 million versus $31 million in the prior year. Capital expenditures for the first quarter totaled $12 million versus the $26 million in the first quarter of 2008. And for the year we continue to expect CapEx to be approximately $35 million, a 65% reduction versus 2008.

Our total square footage at the end of the quarter totaled 5.5 million square feet, up approximately 1% from the prior year. During the first quarter, we opened nine stores and closed five, ending the quarter with 939 stores. The LOFT division opened six new stores and closed three, while Ann Taylor closed two stores. We also opened three LOFT outlet stores during the quarter.

Turning now to our balance sheet, we ended the quarter with $199 million of cash and cash equivalents of which $125 million reflected the cash drawdown under our $250 million revolver. As you will recall in early March, we made the decision to drawdown half of our revolver as a precautionary measure in what was a very uncertain credit market environment.

As we indicated at the time we did not intend to use the cash but to keep it in reserve and in fact we haven’t used it. We will continue to monitor financial market conditions and as the year progresses and we build our cash position, we may choose to pay down all or a portion of the revolver before year end.

In terms of operating cash flow during the quarter we used $26 million of cash including the benefit of a $34 million income tax refund we had been expecting this spring. We also spent $12 million on capital in the quarter. As you know, we typically generate cash in the second quarter of the year and we do expect to do so again this year.

Looking ahead to the second quarter, while we’re not providing specific guidance, we wanted to provide some insight on how we are thinking about our expected performance. As we stated in our release this morning, we remain focused on managing the business conservatively through the current recessionary environment, while simultaneously positioning both brands, particularly Ann Taylor for an improved second half of 2009.

We expect the top line to remain under significant pressure in the quarter primarily at the Ann Taylor division. As a result we expect our top line trend for the company to improve only modestly for the second quarter.

We expect to achieve a solid gross margin rate in the second quarter that is in line with the 52.4% we achieved in the second quarter of 2008. And finally, SG&A expenses in the second quarter are estimated to be approximately $245 million.

Turning now to the full year. We anticipate that the macro environment will remain difficult and that our top line will continue to be under pressure. However, we do expect our sales trends at both brands to improve in the second half.

We expect total square footage to decline approximately 2% for the year reflecting the impact of the 37 stores planned for closure this year, partially offset by the planned opening of 14 new stores in fiscal 2009.

We expect our gross margin rate for the year to improve versus year ago, due to continued aggressive inventory management, improved product at both brands, and our expectation for a gradual return to more rational promotional activity in the sector.

We expect SG&A for the year to be below year ago reflecting restructuring savings and our ongoing focus on cost reduction. And finally, we will continue to be highly focused on maintaining a healthy balance sheet and building cash throughout the balance of the year.

We expect our year end cash position to be in excess of the cash position we reported at year end fiscal 2008 excluding any borrowings under the revolver. And with that, I’ll turn it back to Kay.

Kay L. Krill

Thanks Mike. Before we go to your questions I’d like to leave you with these thoughts. This past quarter for us was all about maximizing gross margin and reducing expenses, while we continued the important work of positioning both brands, particularly Ann Taylor for the fall season. In each of these areas of focus we made good progress in the first quarter. For the second quarter we do not expect to see improvement in the macro environment and we expect our top line results to again be under pressure primarily at Ann Taylor.

Our focus for Q2 will again be on aggressively managing inventories and expenses to deliver a gross margin rate in line with the second quarter last year. At the same time, we are all very excited about the work we’re doing to position both brands for the fall season.

With that, let’s open it up to your questions.