Question-and-Answer Session
Operator
(Operator Instructions) Your first question is coming from Jennifer Black with Jennifer Black & Associates. Please go ahead.
Jennifer Black - Jennifer Black & Associates
I have a couple of questions; Red’s goods you said would be fully into stores at Mexx in September. Is that correct?
William L. McComb
Yes, you are speaking of Red Gottfried, the head of design. Correct.
Jennifer Black - Jennifer Black & Associates
Yes, and I just wondered, are there any changes that she has made to the holiday assortment just based on the current environment?
William L. McComb
I think that the answer to that is changes versus the fall assortment, which is shipping now, Red has continued to refine what -- the changes in product execution there. Overall, I talked about changes in fit, changes in quality, and with regard to aesthetic, they reduced the number of SKUs, the line has a clearer refinement to it, and they spent some time with consumers in each of their five core markets to get reactions to the fall line, and they made what I would call tweaks. The overall position and product aesthetic that they have pushed harder to reflects a contemporary, diverse, and true European brand look. And I think that what one of the call-outs or one of the changes from the consumer research was a merchandising one to reflect a slight change in the mix of casual versus city refined. But not what I would call a quantum leap.
Jennifer Black - Jennifer Black & Associates
Okay. All right, I was just kind of curious. And then two, I wondered if you could give us an idea of what we should expect on operating margin goals for the direct brands say over the next year or the next two years; if you could just give us an idea of what you guys are thinking.
William L. McComb
Well, there are a couple of places that we would tell you to turn in what we’ve talked about before. I mean, today what we said is we’ve talked about the overall enterprise in 2010 having an operating profit margin in the 9% to 11% range. We’ve long talked about the long range aspiration for direct brands to be in the mid- to high-teens on an operating margin perspective, so I would just use those two data points really to answer your question. Clearly in November when we come forth with guidance for 2009, we’re going to provide a lot more specifics on the capital budget, more specifics by concept on number of stores to expect next year but between those two guideposts I think would lay the answer.
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