Barbara Wyckoff - Buckingham Research

Hi one more follow up. What’s the latest approach to collection? Do you need it and/or you’re using it as a testing ground; sort of where are you in the idea of collection?

Trudy Sullivan

Well, Barbara I would tell you we are still testing it. We believe there’s a room in our assortment, because we want to have the peak of the pyramid. We haven’t expanded it’s footprint at the store level, yet we’ve gone back. Our approach on collection is that it truly is 30% to 50% more expensive than core, but stylistically it relates to the core offer. So, it would allow our customer if she wanted to buy a component of collection and match it back to something that might be less expensive than core. We think there is room for it, but we are going to walk before we run. We are very pleased with how it looks as we go forward into spring summer and we’ll stay tuned. Once we think we have refined our approach, we believe we could double the number of collection stores, but we are not going to do that until we have some more proof of the approach that we are taking.

Operator

Your next question comes from Dana Telsey with Telsey Advisory Group.

Dana Telsey - Telsey Advisory Group

Hi good morning everyone. Can you talk a little bit about sourcing; what you’re seeing in terms of sourcing costs; how that’s changed and also opportunities for IMU given the current assortment? Would the changes in ordering patterns and just the changes in the economy of the scale because the size you are busying; is there any adjustments? Thank you.

Trudy Sullivan

Well, we have significant sourcing opportunity and I would say that IMU is right up there. So, we’ve got some very aggressive objectives for IMU. For spring season alone we’re looking at greater than 300 basis points improvement in IMU over the last year as we just start to implement our supply chain strategy. We do have some significant opportunities from several areas. One is country migration, so that we are actually handling that in a much more effective way. One is that the whole competitive bidding and negotiation skill set that we’re frankly under leveraged it as a company and then thirdly, leveraging our vendors buying power with our mills and so, we see tremendous opportunity in our supply chain. We have a great new team there, led by an incredibly capable chief supply chain officer and we’ve laid some very significant tract for improvement in 2009 and 2010.

Operator

We don’t have time for anymore questions. Ms. Sullivan, please continue with any closing remarks.

Trudy Sullivan

Well thank you for joining us today. We are encouraged by the signs that we are seeing in our business, particularly in response to our merchandising and creative. We feel we are moving in the right direction. Thanks to our partnership with Aeon; we believe we have taken big step to improve the liquidity of the company and we’re managing through this very difficult time. We’re taking all the necessary steps to ensure that we have the financial support to see our way all the way through our three year turnaround plan. With that thank you and have a wonderful holiday.

Operator

This concludes the Talbots Inc. conference call. We will now proceed with the full forward-looking statement. The forward-looking contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “achieve,” “plan,” “look,” “belief,” “anticipate,” “outlook,” “will,” “would,” “should,” “guidance” or similar statements or variations of such terms. All of the information concerning our financial outlook, including future profitability, future comparable store sales, future earnings and other future financial performance or operating measures, future credit facilities, future merchandise purchases, future cash needs and other future financial performance or financial position constitutes forward-looking information.

Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company; are not guarantees of future results or performance and involve substantial risks and uncertainty, including assumptions and projection concerning our internal plan including our budget for regular price and marked down selling and operating cash flow for forward periods. All of our forward-looking statements are as of the date of this release only. The company can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially from our forward-looking statements. The company does not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances occurring after the date of this release. Even in such result, changes or circumstances make it clear that any forward-looking information will not be realized.

Any public statements or disclosures by us following this release, which modify or impact any of the forward-looking statements contained in or accompanying this release will be deemed to modify or supersede such statements and/or accompanying this release. Our forward-looking statements involve substantial known and unknown risks and uncertainties as to future events, which may or may not occur, including the following risks. The companies decision concerning and the risks and uncertainties associated with the decision to pursue a sale or disposition of the J. Jill brand business including the timing, consideration, maybe received or other terms of any such sale or distribution.

The impact of the continued significant deterioration and the U.S. economic environment, including continued negative impact on consumer discretionary spending, the disruption and significant tightening in the U.S. credit and lending markets, recessionary pressures increasing and unemployment and fluctuation in energy lending markets, recessionary pressures including unemployment and fluctuations in energy, prices and the value of U.S. dollar, significant impact of the global financial crisis and the retail consumer industry, including bankruptcies and governmental actions, the success and customer acceptance of our new merchandise offerings including our winter and other seasonal fashion and merchandise offer.

Our ability to accurately estimate and forecast future regular price and markdown selling and operating cash flow, achieving the company’s sales plan for the balance of the year, achieving the company’s operating cash flow plan for the year, successfully executing the company’s strategic initiatives, including supply chain initiatives, anticipated lower inventory levels, expected operating expense and other cost reductions, the success of the new promotional cadence for the Talbots brand, reduce markdown exposure and improved gross margins.