Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Paul Lejuez - Credit Suisse.
Paul Lejuez - Credit Suisse
Can you maybe just clarify what you were saying on payroll shifts? What was it that hurt expenses in the third quarter? Michael, given what is happening in the environment how much have you changed the amount of up front buying you are doing versus buying in season? If there is any type of clarification you can provide there that would be helpful. Also, just wondering in terms of product availability would you say the next 12 months can be as good as the last 12 or would you say it is tough to get much better?
John Call
I’ll take the first piece which is the shift in some store expenses. We shifted some payroll dollars this year from the fourth quarter to the end of the third quarter as part of our strategy to align store payroll more with some of the functional activities such as the hit of receipt period, rather than how we had done it in the past which was just based on sales volume. So that shift was about 30 basis points from the fourth quarter to the third quarter. I also mentioned there was about 25 basis point favorability in the 2007 compare that related to a one-time item where we had a settlement related to some construction defects in one of our distribution centers. The other 5 basis points is just basic de-leverage based on the negative comp.
Michael Balmuth
Relative to up front buying, we predominately buy close outs. There are a couple of pockets in the store where we do a little more up front than others but for the most part we are a close out store. With that said we do still do some up front and yes we have pulled it back and the numbers are not gigantic that we were doing nor is the pull back massive. I don’t have the exact number at my fingertips but we are certainly buying less up front product than we were before.
Relative to product availability, it obviously based on market conditions has been a very good time to be an off-price buyer. As we look forward to next year we anticipate that product availability will still be very strong as a result of the fact that we do not anticipate that inventories will fall off the line in mainstream retail. It may have been harder for the retailers to get their handles on to date and we think that will continue.
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