Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Montagna with CL King.
Mark Montagna - CL King & Associates
You mentioned deemphasizing home and linens, which I’m curious when you expect to get to your planned inventory levels for this. Then, I imagine you’re probably going to reposition some of the square footage, which is probably a fairly large project. How long will it take to get to the planned inventory levels and then to reposition square footage?
William Moll
It will probably be at the end of fiscal 2008 that we will be at the position that I really wanted to be, but this process has started in place right now and you will see changes taking place in the third quarter of this fiscal year.
Mark Montagna - CL King & Associates
When you say get it to this, are you referring to the inventory, or are you referring to inventory and square footage?
William Moll
Both.
Mark Montagna - CL King & Associates
All right, that’s pretty quick. You said apparel has weakened in the past few weeks. Does that mean that the comps thus far through May are actually weaker than the trend for the first quarter?
William Moll
We can’t give guidance on those numbers right now, Mark.
Mark Montagna - CL King & Associates
Then just regarding the clearance inventory at the end of the first quarter, it sounds like it’s not quite at the planned levels that you had perhaps hoped for at the beginning of the quarter. Is that fair and then what percent of the total inventory would be clearance this year versus last year?
William Moll
No, clearance aged goods are actually in a better position than we anticipated. I do not have the percent with me right now, but no we feel that we are clearing goods at the rate we went to. It’s just overall business, as Linda stated, was off of our comp plan.
Linda Farthing
The issue is, in terms of spring/summer goods that we obviously would not have addressed early in the first quarter, because the weather hadn’t warmed up. I mean these are things based on rate of sale that we’ll need to address in the second quarter.
Mark Montagna - CL King & Associates
I guess that’s where I’m a little confused. It sounds like you have some markdown liabilities, more than you would have liked to have had heading into the second quarter. Is that fair or?
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