Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question from Connie Wong of Cowen & Company.
Connie Wong - Cowen & Company
Thanks for taking my call. This is Connie calling in for Laura Levitan. First question is for Ray; obviously you guys have seen some early successes with the recent launch of Tools For Living and now you are expanding it into two retail locations, both in L.A. and in New York. Can you talk to us about the format of those studios, or those stores? Is it going to be similar to what we see in the studios?
Ray Brunner
What we want to find with Tools For Living and we have a unique opportunity to do it at what we believe is a very acceptable risk level, is what impact making that product available cash and carry has on that assortment and we do not want to do cash and carry in our studios. As we’ve said before, we don’t believe that makes sense for our model.
We have a unique opportunity in that the Santa Monica store when we first opened, it was 2,200 feet, a couple million bucks, we expanded it, took over the space next door to 4,300 feet or so, took over about 2,100 feet and the business went up to a little over $3 million. Then we expanded it again to the third bay so it became about 5,500 feet, but the business stayed at about $3 million. So we’ve got a building where it was three stores, we had combined it all to one. We can cut part of that back and reopen it as a separate store with no additional rent expense to the company, just a bit of CapEx, not a lot, really.
In New York, Soho was our first New York store. We had a very favorable and long-term lease deal there. That store has performed incredibly well and we’ve been able to secure a larger location very near there, which we’ll be announcing shortly and we’ll convert that location to a Tools For Living store.
Again, it’s a good situation. We believe that Tools For Living, from what the customers have shown us in their response in the fourth quarter and so far actually this year, is a very interesting segment of the business and with cash and carry, it gets more interesting.
Connie Wong - Cowen & Company
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