Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Baugh - Stifel Nicolaus.
John Baugh - Stifel Nicolaus
I guess my first question is for Glenn, on the marketing push with Young America. What specifically are you doing in dollars? I understand the manufacturing shift and the disruption, but you seem to indicate there’s some impact on the marketing side or to your customers, and I’m wondering if you could just sort of elaborate a little more on the manufacturing disruption piece versus the marketing disruption piece.
Glenn Prillaman
Sure John. The major disruption in the factory is just making new products. They are not products that we haven’t made before, but as we began to source overseas certain products that were more labor intensive, more material intensive, ‘99, 2000, like beds, bunk beds, cribs, things like that, we really focused our factories on making cases.
So now that we bring those cribs and bunk beds, beds back here, we’ve just got some challenges in making those new products, but nothing that we haven’t had engineered before and made before.
John Baugh - Stifel Nicolaus
Then on the marketing side, what specifically are you doing? Are you increasing marketing dollars? What’s the impact to any of this to your dealers? Maybe carry a little more inventory, finished goods, bringing the sourced stuff in first before you make the stuff here, etc.
Glenn Prillaman
We are not planning on increasing the marketing dollars. We are going to keep our costs in line there as far as our fixed selling. Our main mission on the marketing side is to get across to the consumer at the retail level.
This idea of a market leadership position in color and choice, and the indoor air quality of a nursery in creating a safety level of our product that’s far and way above what is called compliance or the law; and then just because we control the production now, the quality and service, we definitely think we can improve on that. So no, not any kind of increase in marketing costs to get this across.
Albert Prillaman
Hey John, just to add to that, what we’ve really done between what we started now and will complete in the first quarter, and keep in mind, Young America is nearly half of our business. We have reinvented the entire product line, and with finish options, safety options, safety requirements, that really can’t be a match in the industry. Now the consumers may have to pay a premium for it, but she was already paying a premium for our product. But now we give her a reason to pay the premium.
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