Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) and for our first question we go to Scott Krasik with CL King.
Scott Krasik - CL King
Thanks. Hi guys, congratulations.
Mike Casey
Thank you.
Scott Krasik - CL King
First question is on Carter’s wholesale. I know you don’t you like to talk a lot about what you are seeing on going, but you did say that spring is up quarter-to-date; what are you seeing there on the sell-throughs? What’s going on with the category? How are they viewing private-label at this point versus brands in terms of driving traffic? A lot of clarity there will be helpful.
Joe Pacifico
Okay, this is Joe. As we said, we are off to a good start for spring and we feel that trend should continue, but it’s really early. Again, the same strategies we employed for fall ?08 roll into spring ?09, so we expect to have a relatively good performance. A lot depends on the consumer, but we are off to a good start and feel our spring orders were positive, so we feel good about the business.
Mike Casey
I will tell you one other thing Scott I think that’s working for us; the inventory is cleaner than it has been in recent years. If you remember this time last year, most retailers were backed up with inventory. So, there was heavy discounting in the first quarter of last year to clear that inventory out and make room for new product. We don’t have that situation this year.
I think most of 2008, our retail customers were rolling inventory, collecting inventory levels; our largest customer I think they had quoted that by the end of their third quarter they had hoped their inventories year-over-year would be down about 15%. So, I actually think that has worked well for us and we are hopeful that provides us some better earnings opportunities in 2009.
Scott Krasik - CL King
Is the sales growth meaningful from the shop-and-shop installation; can you break that out?
Joe Pacifico
Yes, we modeled those shops that they have to deliver. A 5% sales growth would deliver about a 14% ROI. I mean we are achieving our plans, we are pleased with it. I think the customers are very pleased with it, so feedback from the customers has been terrific. If you were to stop in the stores today, where you’d see most of those shops are in Kohl’s and J.C. Penney and to some extent in Macy’s.
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