Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Shanley – Susquehanna International Group.
John Shanley – Susquehanna International Group
You mentioned in your comments that the company is planning on downsizing the store footprint. Can you give us an idea what you envision would be the ideal size of a Finish Line store going forward and is there a game plan in place in terms of reducing the square footage of some of the bigger Finish Line stores that are already in existence.
Alan Cohen
When I referred to downsizing I was talking about in some of the renegotiations, leases that are coming up and things like that in particular in my initial comment. You’ve raised a good point. That is something that we are focusing on and concentrating on. This year the new stores that we’re anticipating that we’re going to open are probably going to average somewhere between 3,500 and 3,700 square feet which is certainly a lot smaller than the average of all of our existing stores which is about 5,500 square feet.
Also we’ve talked about the test that we’re doing with Finish Line 4.0 which is 3,000 to 3,500 square foot stores with a new fixture package and new look and feel which we’ve got a couple of those stores open which are doing very well. They’re performing at a much higher per square foot sales ratio than the rest of our company. We are intrigued with trying to operate smaller stores, get higher per square foot performance, more productivity and hopefully more profitability.
As far as downsizing our bigger stores it’s not that simple. We have a lot of very big stores, stores that might be 10,000 to 15,000 square feet that are performing very well. What we have to do is we have to look at every one of our stores individually, store by store basis, look at the economics of the deal, look how the stores are performing and then when we have the opportunity when the leases are up or when we have some other sort of an opportunity if we think it makes sense to downsize we’ll downsize to increase productivity and profitability.
John Shanley – Susquehanna International Group
The company’s gross margin level in the quarter was considerably stronger than what we had anticipated up 220 basis points as Steve pointed out. Can you give us an idea what product categories in particular really helped to drive gross margin improvement were there some products that really were major contributors to the bottom line results in the quarter?
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