Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Analyst for Aaron Stein – J. P. Morgan.
Analyst for Aaron Stein – J. P. Morgan
Just a few questions, good job on the inventory down 11%, if you could just help us with a little bit more details on where in the store, what areas, what categories those reductions are taking place the most?
Joseph J. Lombardi
The reductions in the inventory, what we attempted to do throughout the business was reduce the inventory where the sales were sort of most declining so obviously music is declining significantly and inventory came down there but all across the board we looked to improve the turns so those parts of the business and those areas of the business that declined more obviously had a large inventory decline.
Stephen Riggio
The key fact is that our selection in the stores remains as strong or even bigger than ever because what we’re doing is working the supply chain. We’re delivering books on a more just-in-time basis and making sure that the inventory both on the shelf and in our warehouse is as sufficient as possible. So, not only did we maintain title selection but we were able to increase turns by reducing the amount of copies, particularly in distribution center or excess inventory that’s typically on the shelf that you don’t need. We’re very rapid in replenishing stock and every year we keep turning it up a little notch here and there.
Analyst for Aaron Stein – J. P. Morgan
In regards to looking at SG&A dollars next year if you can help us a little bit on how to think about that? And, also in regards to what your fixed cost hurdle rate would be next year provided the steps you’ve taken to improve efficiencies.
Joseph J. Lombardi
We’re working to hold SG&A levels in 2009 with those of 2008 as a percent of sales. That’s our goal. We will continue to focus on obviously managing store payroll being the biggest chunk of that in the declining sales environment but we’ve also taken actions in 2008 and will be taking actions in 2009 to reduce or eliminate expenses throughout the business given the current climate. So that’s our goal and we’ll continue to sort of invest where we think it’s appropriate and reduce expenses or cut them where we think it doesn’t make sense at this point.
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