Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) Your first question will come from the line of Irene Nattel - RBC Capital Markets.
Irene Nattel - RBC Capital Markets
Good morning, gentlemen. A few questions if I may on Harry Winston. First of all, if we look at the sales growth from the existing network, can you first of all quantify it -- and I am sorry, I don’t have the presentation in front of me in case it is in there -- but also if you could talk a little bit about whether the growth came from higher spend from existing customers or an expansion of the customer base?
Tom O’Neill
Irene, I think you know we don’t break the business down that way. I can give you some kind of an overview. The existing business is really a list of existing international clients who have residence in several places in the world where they choose to buy from Harry Winston in a given year. We actually don’t have very much control over that.
Certainly, the physical growth of the business has been dramatic over the past two years, and you can see certainly that the new locations have added significantly to our business.
Irene Nattel - RBC Capital Markets
Thanks, Tom. A question on the gross margin impact in Q4. I recognize that is an accounting adjustment. But it was there in Q3, it was there in Q4. Should we be expecting a similar kind of impact in Q1 and Q2 or even further in FY08?
Alice Murphy
Absolutely. That adjustment is going to roll through in two stages, one relating to the first and one relating to the second phase of the acquisition. The impact will clearly decrease over time but you should definitely expect it going through all of FY08.
Irene Nattel - RBC Capital Markets
Thanks, Alice. The receivables write-off in Q4, is that something that happens on an ongoing basis or was that also somehow related to the acquisition?
Alice Murphy
No, it has nothing to do with the acquisition. It related to a very specific account and it was actually the reversal of that. So it’s not anything that we anticipate going forward.
Irene Nattel - RBC Capital Markets
That’s great. Can we get the depreciation specific to Harry Winston in the quarter?
Alice Murphy
It is not something that I have in front of me right now.
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