Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Scott Krasik - C.L. King & Associates, Inc.
Scott Krasik - C.L. King & Associates, Inc.
I might be looking at this the wrong way, you say that MPD data is up for the quarter 2.8% in your categories yet your sales were down. Does that mean you are losing share or is that not apples-to-apples? How should I think about that?
Maurice S. Reznik
There is a lot of inventory pressure so basically we’re just turning faster.
Scott Krasik - C.L. King & Associates, Inc.
Okay, so destocking by retailers.
Maurice S. Reznik
Yes, so our stock to sales ratio basically our sales grew at a faster rate from a stock-to-sales perspective.
Scott Krasik - C.L. King & Associates, Inc.
Can you give us some sort of order of magnitude in terms what the stock to sales is at this point versus a year ago?
Maurice S. Reznik
I would have to give you a very broad range but I would just say that in general every retailer that we do business with, or expediting their, they basically have faster turnover requirements than they did in the past.
Scott Krasik - C.L. King & Associates, Inc.
Do you feel like you’re at the point now where the de-stocking is over, that these guys are working off the appropriate inventory, both in department stores and mass, or could we see some further reduction there?
Maurice S. Reznik
The only caveat is, obviously, inventories can always go lower but we did see signs in December, particularly where replenish orders were actually very strong. So we feel that our stock to sales is at a level now that retailers are buying back their sales, so we feel good. And it’s always about product relevance and those two components, and we feel pretty good about it.
Scott Krasik - C.L. King & Associates, Inc.
And I’m sure some of the cost benefit that you could get in 2009 are being masked by intense promotions, but maybe talk on the cost side, are you going to actually see some benefit there going forward versus what your original expectations were for 2009 and beyond?
Christopher W. Vieth
On the product costs?
Scott Krasik - C.L. King & Associates, Inc.
Yes.
Christopher W. Vieth
As we have talked before, we have always had a pretty deep focus on cost savings initiatives at the company. We have taken that a step further and formalized the process. Actually we have dedicated resources in Hong Kong and here in the States and we have got people on the ground right now in Hong Kong, for the next three weeks, working with all our suppliers and vendors to partner to look at every single component that makes up our products and drive further cost savings initiatives.
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