Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Betty Chen with Wedbush.
Betty Chen – Wedbush
Thank you. Good morning, everyone. And congratulations on managing your balance sheet so well in this environment.
Kay Krill
Thank you.
Betty Chen – Wedbush
I was wondering if you can talk a little bit about some of the trends you are seeing right now, Kay. It's obviously very difficult, and we're hearing that customers are increasingly looking for newness. I know you've talked about planning spring very conservatively and hoping for some improvements, especially in the back half as the commercial environment eases. How should we think about the first half and some of the levers you have to try to draw consumer interest and continue to improve conversion as you see so far in February?
Kay Krill
Okay. Overall, our sales are still under pressure, and we're experiencing comp weak business across the business. However, Loft is trending better than Ann thus far in the season. Our stores are really the cleanest that they have ever been, and we'll continue to control our inventories this year, which I think is really critical for 2009. This should significantly improve our gross margin results, and as Mike said, we realized improvement in February already. This year is really all about maximizing gross margin dollars. I think it's less about comp than gross margin dollars.
And let me just give you a little glimpse by brand for what I feel about spring. Ann, I think our spring product is – definitely could have been more improved than it is. It gets better as we head into the second quarter. It is focused on dresses and more versatile sportswear pieces. I do think our tops assortment could have been stronger, and it definitely will be for fall. Our May product really begins to reflect a more modern hand, and definitely reflects more brand appropriate marketing. However, the product and marketing for fall, in my opinion, is our best yet. The team has done an amazing job. We're going to maximize the gross margin in this division as best we can for the first half, and that's really our focus.
For Loft, our product assortment definitely reflects a more casual, fashionable, and fun element, and we're seeing strength already, especially in casual bottoms and tops. We have incredible value at Loft, and we need to pound on that message harder for spring and going into fall, because that's our strong suit, and we need to get that message out in a compelling way. So I think we have several levers. I think maximizing our inventory that we do have, maximizing gross margin dollars, and really differentiating and maximizing the essence of each brand and marketing to her in a compelling way that really highlights our value message.
Betty Chen – Wedbush
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