Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Blaeser - Morgan Joseph
Jeff Blaeser - Morgan Joseph
A few things on the CapEx if you could give us, what’s the base minimum CapEx, CapEx per store and the impact from the new distribution center this year?
Ed Record
First, with the distribution center we’ll spend about $9 million this year. We did have additional spend last year I think that brings our spend into mid teen range over the two years. We spend about $0.5 million for a new store in CapEx, it varies on the deal and depending how much landlord allowance we get but on average its $0.05 million.
Jeff Blaeser - Morgan Joseph
Have you seen any change in the terms for new store openings in terms of better rates going forward?
Andy Hall
I think in total we haven’t seen a whole lot of change in the small town America real estate market. I think moving the new store opening to 30 to 40 stores versus the 50 to 70 that we were looking at previously affords us the opportunity to be more selective in our stores and we can push back and make sure that we get the best 30 to 40 deals that are out there. Having said that I think the terms will be slightly better this year because we’re not opening as many stores but generally speaking I think the real estate environment looks to be the same out in small town America.
Jeff Blaeser - Morgan Joseph
On the gross margins it may be difficult to quantify but the impact from the two hurricanes obviously the $10 million in sales and probably some additional promotional activity skewed with that but is there any way you could ballpark a figure on what you thought gross margins would be without the hurricanes?
Ed Record
We haven’t really quantified that. Obviously the biggest impact would have been on the fixed costs which de-levered on the $10 million. The rest of the margin we de-leveraged our per markdowns because of the lost sales and that would have had an impact but we really haven’t quantified it.
Operator
Your next question comes from David Mann - Johnson Rice
David Mann - Johnson Rice
On the store openings is there any chance of delaying them further to conserve or reduce CapEx more in ’09?
Andy Hall
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