Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Neely Tamminga - Piper Jaffray.
Neely Tamminga - Piper Jaffray
On the product side, are you seeing in Q1 trends so far that your conversion rates have actually improved relative to Q4? I know you were talking about the same comp rate. Maybe said another way, are you just lacking some inventory? Can you just give us some sense behind the health of the Q1 comp versus Q4?
And housekeeping for Michael, off of what base rate are you making the increase in cost of sales? Guidance in Q1.
Trudy F. Sullivan
We are seeing conversion rates in Q1 slightly favorable to Q1 a year ago, but obviously the conversion in Q4 is a different, is a seasonality that’s very different. So, it’s slightly less than Q4 but slightly better than Q1 2007.
Michael Scarpa
From a buying and occupancy perspective, obviously we restated first quarter for discontinuing operations so we are looking at roughly a 59.3% rate for cost of sales, buying, and occupancy.
Operator
Your next question comes from Jennifer Black - Jennifer Black & Associates.
Jennifer Black - Jennifer Black & Associates
I wonder going forward what percent of your business will be refined, casual, and special occasion. Just kind of guesstimates. And I then I wondered, also, with your merchandise assortment, do you feel you have the right breadth or do you feel you go narrower and deeper?
Trudy F. Sullivan
As I said in my opening remarks, we are seeing the customer reacting more favorably on the casual side of the business, so you know casual has always been a dominant part of the Talbots offer but it’s increasing for 2009.
I’m not quite sure what you mean, mentioning breadth and narrowing deep. One of our key learnings, certainly in the fall season, is that she still likes the breadth of color assortment and doesn’t like the offer to be too singular, so we are very, very conscious of that. We have a customer that has a very high visit rate to our stores and we know we need to continue to have enough breadth of assortment but within that we want depth in key items, which are also critical to driving the business.
Operator
Your next question comes from Tracy Kogan - Credit Suisse.
Tracy Kogan - Credit Suisse
Just looking at your SG&A in the fourth quarter, given your cost reduction per [rams], I would have expected it to come in a little lower. So I was hoping you could maybe quantify some of the moving pieces in SG&A, such as marketing and maybe how much that consulting fee was.
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