Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Janet Kloppenburg - JJK Research
Janet Kloppenburg - JJK Research
I was just wondering if you could talk, you said that you would be mindful of your capital so I was wondering if you could talk a little bit about 2009’s expansion plans on the domestic front and if you’re thinking that you should be more conservative there and you keep talking about the expenses associated with minimum wage and the pre-opening expenses, I’m wondering if these are any different then the expenses you’ve been incurring all year with respect to minimum wage and the pre-opening expenses or if there’s been a step-up in those expenses?
Michael Jeffries
Regarding domestic expansion, the answer is we have reduced our initial look at domestic expansion. Its going to be very minimal. Our total, we are very mindful of preserving capital. We have looked at capital on a store-by-store basis wherever the store might be. We will have the ability to flex down, we have already flexed down, but we have the ability to flex down even more through March of next year, for an opening schedule for next year.
But the answer to the question is domestic openings, very, very few.
Brian Logan
Regarding the minimum wage and the pre-opening expense, that is correct we have been incurring incremental pre-opening rent and wage expense as compared to the prior year and that has been going on for the entire year.
What is a little bit different, there was a step-up in the third quarter with both pre-opening rent and minimum wage, part of it wasn’t the minimum wage it was the managers’ salary increase so the first half of the year the minimum wage impact was $2.5 million for each quarter and the back half of the year the quarterly impact for the minimum wage and managers’ salary was $5 million for each quarter.
And then the pre-opening rent as we add, begin construction with new flagships that number has gone up a little bit during the year. It was in the $4 million range in Q2, $5.5 million in Q3, and we’re looking at $6 million in Q4 and these are incremental versus last year.
Operator
Your next question comes from the line of Jeff Black – Barclay’s Capital
Jeff Black – Barclay’s Capital
There’s a lot of concern out there about your own contract ending this year, can you just comment on your willingness to stay in your current position as CEO or alternatively outline who we should be looking to on the bench there at A&F.
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