Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Jeff Black with Lehman Brothers.
Jeff Black - Lehman Brothers
Thanks very much. A couple of questions; one on the cost of goods benefits, Glenn have you made any progress there? It seems like the message was to assume that we get those sooner rather than later? Then on the real estate plan, what are your thoughts around additional foreclosures, I see we are going to go up to 65, it looks like at Gap this year. However, how far we away from the divisional analysis and what does that initially look like? Any light you could shed there. Thanks.
Glenn Murphy
On the cost front, we certainly got a little bit of benefit in Q1. We have been working at it for the better part of six or nine months, so there was some benefit in Q1. We continue to work aggressively with the people in our regional hubs, as you know we operate in almost 50 countries. We have five significant hubs and the brands and the hub leaders are working together to make sure that we are coming to the market in an appropriate way, making the changes we have to make internally to guarantee we are getting it recognized for the cost that we, I would argue should not be paying historically, and we are making some adjustments in all fronts of our business to make sure we can deliver on. One of the priorities in our business is to get a reduced a cost base and one of those key areas of reducing cost is cost of goods.
On the store front, I think what we have been and we will have a much better sense, Jeff, in the next two to three months, but one thing we have been articulating is, will there be some store closures, absolutely. My view right now is that we will be closing stores going forward, but at a decelerated rate. We are going to have a portfolio of about 3000 stores. Its natural every year, you are calling out some stores that just do not belong, some of those might be repositions or relocations. However, some of them are closures that we just do not feel good about any more. As we look at our strategy by market and by region. So, some more store closures are certainly in our future, over the next three years, but at a decelerating rate and the real opportunity for us is going to be looking at that square footage per store.
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