Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question for today (ph) is from Jennifer Watson from Goldman Sachs.
Jennifer Watson - Goldman Sachs
Thank you. Two questions, first, when we look at the $50 million in costs savings, plenty to implement. In fiscal year 2010, it seems without a rebound or a significant rebound in fiscal year 2010 revenue growth. Would you anticipate margins to be below levels for fiscal year '08 or do you think you can get them back up to the levels we saw them?
William Shea
We anticipate what Jen?
James McCann
Yes, Jen we didn't hear you.
Jennifer Watson - Goldman Sachs
With the cost savings of $50 million, do you anticipate that, you think that margin is back up to the level that they were in fiscal year 2008, with or without a rebound in revenue growth in 2010?
William Shea
We are clearly sizing the business and taken the operating costs appropriately out. We think we have identified significant cost cuts that will certainly improve our operating margins over our fiscal '09 levels. I think, the upside is when the economy turns and we start getting some revenue growth. We think we can be significantly more profitable than we were in fiscal '08.
Jennifer Watson - Goldman Sachs
Okay, got it. And then also just what marketing channels did you find to be the most and/or least successful in the December quarter? And what are you depending on, heading into the Valentine's Day period. And if you can comment on any changes in the rates of that different advertising medium that will be helpful also.
Joseph Pititto
I think on the marketing channels the least productive channel we have is catalog marketing especially on the prospecting side when you see us that's where most of the reduction that come from on a go forward basis especially as we resize the Home and Children category.
So as we look into the Valentine holiday, clearly it's the best marketing efforts that are producing the ROI for us right now or any marketing efforts aimed at our existing customer base. So while we are still able to attract new customer to get a higher acquisition rate, so you see us... increased repeatedly that you saw... other things you could expect to see as we go forward into the Valentine holiday as well.
Jennifer Watson - Goldman Sachs
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