Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Margaret Whitfield - Sterne, Agee & Leach.
Margaret Whitfield - Sterne, Agee & Leach
Regarding the gross margin, I wonder if the operating expenses for AVD were included in cost of goods last year in the third quarter. I wondered what the dollar amount of piece goods was in the quarter in inventory. Also you had some stores that have not yet been closed that are planned to be closed, what was the loss imbedded in the quarter, and what is the timeframe for closing these stores? And if you could give us some outlook for the impact Q3 from these stores as well, that would be great.
Thomas Reinckens
First you asked about the inventory I think, the piece goods inventory. And that's apples versus oranges. Last year we didn't have AVD in our second quarter results, the AVD acquisition started July 1. The piece goods, I think we're over $8 million of inventory at the end of quarter two this year.
The good news is the majority of that relates to the great programs that we have in Contour fabrics. We added fabrics. We have lots of new silhouettes that have been hitting into the stores. You get a little bit more discipline in using offshore and shipping some goods via boat. Included in those numbers were good products on its way from Central America on the launch which are now hitting our stores and have hit our stores.
So we're excited because last year we were not in a position of piece goods and it took us awhile. We were running out of stock in many of the Contour items through out the fall season so we're in a much better position.
The answer on the third quarter, yes, the AVD acquisition costs, the operating expenses were included in the third quarter. But I'll caution you. As we acquired AVD on July 1, we obviously had two organizations that had duplicate functions in its arena. As a result of that, we really started to eliminate some of the these expenses in quarter three and even in quarter four last year as we integrated the two companies together.
So right now we're fully integrated and we've got the maximum savings achieved from that integration in our second quarter results from a standpoint of headcount reductions and duplicate functions and that reflected really in the G&A savings that we reported in quarter two. We would expect this year to see that continue into quarter three and quarter four as we move forward.
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