Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Robby Ohmes representing Merrill Lynch. Please proceed.
Robby Ohmes – Merrill Lynch
Thanks. Nice quarter guys. Couple of questions. First, can you give us actually a little more detail on the strength of your merchandize margins and what exactly you are doing there, is it private label sourcing, is it mixed shift towards private label and private brand, because the gross margin looked very healthy given that you had almost 4% comp decline. So, I’d love a little more detail there. The other question I had was on just if you could tell us a little more how Chick's is performing. I know you won’t give the comps. But sort of how it is performing versus your expectations as you are waiting to do the conversions in the next year? I’ll stop there for now. Thanks.
Ed Stack
Robby, the margins – the increase in margins came from a couple different sources. One was better mark-down management. We’ve down very well controlling the inventory and you can see with inventory down 2% on a per-square-foot basis is – the group has done a very good job and our clearance inventory is down 8.7% versus last year. So, the group has just done a much better job with inventory management. We have been able to make some advantages buys out in the marketplace, which have helped to increase the margins. And we expect to – it is our anticipation that we’re able to do that again going forward into the back half of the year. As far as Chick's goes, Chick's are kind of in the zone of our expectations. Whenever you do a conversion like this, it’s always difficult. But Chick's are performing kind of in the zone of what we had anticipated.
Operator
Your next question will come from the line of Matthew Fassler representing Goldman Sachs. Please proceed.
Matthew Fassler – Goldman Sachs
Thanks a lot. Good morning Tim. I guess the first question relates to the composition of the charges, particularly this quarter I know that you had a separation (inaudible) filing for the former CEO of Golf Galaxy. I’m curious if that was a significant part of the charge that we saw?
Tim Kullman
As you might expect, we had charges related to two executive offers at Golf Galaxy. So, the amount of the charge is about a 50/50 split in that $0.9 million pre-tax on the M&I side, and then also related to the $2.6 million non-deductible portion on the tax expense side.
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