Wade D. Miquelon

Well, I think what we are trying to do by showing the savings and the benefit is we are basically, remember, recall we said at the beginning of rewire we would each quarter report what were the restructuring and one-time costs, things like reduction in forces, and we would also likewise report that the benefit we are starting to see. So you can track to that $300 million to $400 million over time and also track to the net flush 500 and $1 billion savings. So that’s the only reason we are giving that. Obviously we’re a company that’s still driving GAAP but we want you to have the perspective of how we are tracking along that and we are folding all those expenses and all those costs into the lines that they belong in. So we will cycle. I mean, think of it this way. The benefits that we are starting to see are going to keep recurring but we are going to cycle these one-time costs. So if you want to know what’s more of a sustainable level, you could effectively take the costs out and see the trajectory that we are on.

Meredith Adler - Barclays Capital

Okay, that’s good. That’s helpful. Now a question about inventory, at what point do you think you have gotten to the inventory that you want to? You are two-thirds of the way down in the SKU rationalization. Is there any other inventory activity that will go on, either the distribution centers or related to CCR? Or when you get done with this category rationalization, you’ll be done with reducing inventory?

Gregory D. Wasson

Meredith this is Greg. I think as Wade said, we’ve still got some opportunity to go through with CCR markdowns but we are also focused on older inventory that we have in the system. We are also focused on better seasonal buying but the big thing, and the thing I am really excited about, is our supply chain initiatives and as you know, or may not know, I moved supply chain under Randy Lewis from…. So he’s managing inventories from the vendor to the customer, all the way through and I think we are going to begin to see incredible opportunity there that I am really excited about. We moved our forecasting folks under Randy and so forth, so I think we will see a lot of opportunity going forward in the supply chain initiative improvement.

Wade D. Miquelon

Just to be totally clear, these costs that we are incurring now associated with rewire are really only those SKUs that are being discontinued permanently but there’s as Greg alluded to, there’s lots of opportunity for us to keep improving overall inventory as a separate ongoing structural initiative.

Gregory D. Wasson

We’re working with our vendor partners in ways that we haven’t in the past to provide a more seamless exchange from them to us.

Meredith Adler - Barclays Capital

That’s great. And when you look at the categories that you have already rationalized, did you get a complete transfer of sales to other items in the category or was there any net loss of sales in those categories?

Gregory D. Wasson

For the most part, we are seeing a transfer and a pick-up in sales. We do have about 30-some of the first 40 categories rolled out. We’re beginning to see some nice lift in several of those categories, so I think it’s designed, it’s doing exactly what we had hoped to do, which is a better customer experience and increased lift.

Meredith Adler - Barclays Capital

Okay and I just have one final question. When you think about all the opportunities, have you made any assumptions that the customer will be a little bit disquieted by the changes happening at the stores and that there could be an impact on sales? Or is the assumption in the early reads in the 35 stores that this is just a net positive?

Gregory D. Wasson

Certainly we are surveying and getting feedback from consumers as well as the movement within the stores and Meredith, so far it’s been, we’ve got good feedback. I think one of the things that we’ve heard over the years is that we needed to lower the profile in our stores and I think this accomplishes that and I think that has absolutely been received well. And I think we aren’t changing the stores so drastically that shoppers are confused as far as where items are and so forth. So far, we are positive with what we are seeing.

Wade D. Miquelon

As Greg said, even though it’s too early to call it a victory, certainly when we initially modeled this, we expected to see some substantial early dip just as shoppers get reoriented in the store and that comes back and increase over time but in fact, really not seeing much of that and we are seeing a very quick trajectory to increased sales. So apart from the anecdotals and the consumer and the survey data all being positive, we’re exceeding the plan significantly both on the dips and on the ongoing, and so that’s a very good sign.