I’m not sure we see it as at the expense of. We see there are emerging brands and even within some of the brands the companies that shall we say own brands, I think they are seeing shifts. A lot of them have their own portfolios right now. Again, I can’t speak to their business but some of them have made acquisitions to better balance theirs. As entities, I think our brand and partners have positioned themselves to be more flexible. Certainly, we have been pleased to see the beginning of some smaller brands beginning to emerge and we will see how that plays out over the next couple of years.

I think the larger organizations mitigated some of the dependency on single brands and we are working with them depending where those shifts are but there are probably some new ones coming along that are a little bit under the radar right now and that is the nature of the business.

Operator

Thank you. And our next question comes from the line of Sean Naughton with Piper Jaffray.

Sean Naughton – Piper Jaffray & Co.

SG&A savings in the first quarter was pretty significant, about $11 million. Is the $35 million number for the year still accurate?

Michael L. Henry

I think if you just do the math there certainly we would expect that number to be higher now because we made that statement entering the year that we would expect to have $35 million of savings. We had given a Q1 expectation and obviously we beat that. So if you just take the Q1 to the bank and leave Q2 through Q4 you are going to come to a higher number.

Sean Naughton – Piper Jaffray & Co.

Okay. And then can you remind me of when your peak working capital requirement is? I’m not sure if you have broken that number out before.

Michael L. Henry

Not in any specific dollars because it all has to do with inventory receipts. It is always right in front of back to school so that the back half of July, early August timeframe and then in the October/November timeframe in advance of holiday. Those are the repetitive annual peaks. That is not going to change.

Sean Naughton – Piper Jaffray & Co.

Okay. And then lastly, on the sourcing front you are clearly skewing a little bit more towards opening price point. What is the situation there in terms of sourcing the private label? Are you experiencing deflation right now for the back half of the year?

Sally Frame Kasaks

Let’s just say we are in a better negotiating position. I think that is perhaps the best way to put it. We see that factories and suppliers are more cognizant of needs, some of these factories that need our orders. So we are finding it is a better negotiating position than it might have been eight months ago.

Sean Naughton – Piper Jaffray & Co.

Do you think that you can receive enough in cost concessions on that front in order to potentially maintain that gross margin level in the third quarter from last year?

Sally Frame Kasaks

Hopefully from a purely merch margin area we have talked about it being somewhat better because don’t forget last year we were liquidating footwear and a lot of our “story” has been based on the reasonable assumption of improvement in merchandise margins going into the back half because of the footwear liquidation in 2008. We certainly have seen, as I think I noted in my comments, even though we have lower price points and we have had to be more agile in terms of meeting some of the promotional cadence which was about equivalent to last year we did still continue to see merch margin improvement and I would expect that to hold.