Scott A. Edmonds: It is obvious that the new store productivity is down and that is one of the reasons why we feel like we have to take a stronger look at ROIC where we allocate dollars by brand, by new store, expansion, relocation. But the slowdown in 2009 or the reduction in the percentage of growth on a square footage basis only cuts out 30 to 50 units. We still will be opening a great number of stores, which is an attack on additional market share. As far as the breakout by brand, we haven''t determined exactly what the impact on the slowdown is going to be in 2009 by brand.

Lauren Levitan (Cowen and Company): On the marketing, are you more focused on acquiring new customers or are you going to be deploying those incremental marketing dollars to go back to the passport members and black book members and try and reengage them and increase their share of wallet?

Michael J. Leedy: We want to acquire both new customers and we also want to passport customers to engage more with the brand.

Kimberly Greenberger (Citigroup): You believe you have got exciting new product offerings this fall. What is giving you confidence that the merchandise in heading in the right direction?

Michele M. Cloutier: The first fall goods landed in stores approximately two weeks ago with the mailer dropping last week. When new goods landed we saw some very strong performance in key categories. The sweaters, denim and outerwear have been very, very strong performers. In addition, the product in this mailer have also given us very strong indications of her response the new product. I feel very optimistic going into September. We had a lot of opportunities that we learnt from the first half of this year, primarily in the mix and the balance of the assortment that we have addressed for September. One of the other critical factors that we learnt from the first half was the penetration of fashion and novelty, where we saw a strong performance in the second quarter, which we have gone after. Finally, in the AUR mix, by mid-September we will flat on an AUR year-over-year, which had been critical to the future success. We remain very optimistic about September; it’s going to be a big month for us.

Adrienne Tennant (Friedman, Billings, Ramsey): Could you provide inventory details by divisions?

Charles J. Kleman: We don’t give the inventory by brands. We don’t want to go that route to start giving that information out. However, there was no significant deviation by any of the brands and they were all in the same range

Jennifer Black (Jennifer Black & Associates): Do you believe there is a fundamental change in the way the boomer shop? Looking at last holiday and the July, August timeframe, could it be that the boomer is spending more time with families, vacation and September is what she goes to shop?

Scott A. Edmonds: I don’t think that I have seen anything or we have seen anything that would indicate that her shopping patterns by season have changed. But what we do think is that the psycho-graphically, the customers is changed and a 50 year old today is a look for the same merchandise of 50 year olds is looking for 24 months ago and 36 months ago. As you see our product on rollout over the next six months to 12 months, you are going to see what we believe the 50 year old is looking for today versus what if you pull our catalogue from 36 months ago.

Barbara Wyckoff (Buckingham Research): What is the implementation time for SAP at Chico’s in White House and what are you going to do to avoid some of the problems you have experienced and Soma was sort of the transition time?

Scott A. Edmonds: We are certainly not going to integrate both brands into the SAP software at the same time. We have to determine exactly which brand will go first whether it’s going to be White House or Chico’s. But the first brand will integrate mid to back end of next year, and the second brand as late as spring of 2009. We want to make sure that we take our time; so that we don’t have the problems which is why we have pushed one brand to mid to late next year. We also want to make the timing around in between those strong spring selling season and the fall holiday season. We were looking at the timing and as we push the integrations out it’s to mitigate issues, it’s not because of issues.

Marni Shapiro (The Retail Tracker): The AUR declines that you saw in the second quarter, is that driven primarily by markdowns, or was it also a product mix? If it was marked down, is that why we can expect to see it flatten out and reverse in the third quarter?

Michele M. Cloutier: It’s two fold. It is, as you stated a reflective of a more promotional cadence than anticipated that is part of it. But the other part of it in the Chico’s brand is reflective of the lower pricing opportunities that we saw in key categories like Ts and denim a year ago. We are coming up on anniversarying that this fall. It’s the mix of the two that drops the AUR. A less promotional cadence and a different mix of inventory, is going to allows us to get flat year-over-year as we enter September.

Marni Shapiro (The Retail Tracker): Could you talk about White House and Soma over time whether it’s 18 months, 36 months or further out than that? Is it possible for White House and Soma to achieve the same return and capital that you’ve seen at Chico’s?

Charles J. Kleman: The White House side has been gaining ground since we bought them other than the bump on the road that we have experienced now. Over the longer term, White House should certainly come much closer to the Chico’s line than it’s had in the past.

Scott A. Edmonds: Regarding the Soma discussion, the only real public model we have out there is VF’s and they are so big. It’s hard to determine what type of ROIC they were able to achieve over time, incrementally. We are doing as much recon as we can with the people that we know that have worked with VF’s, the people that are on our Board of Directors and things like that. As far as having Soma achieve the same type of ROIC of Chico’s, we never thought it could be that hot.

Lorraine Maikis (Merrill Lynch): You mentioned a macro environment a few times during the call. Does your research show that your customer has cut back on spending or do you think she is going somewhere else?

Michael J. Leedy: We haven’t seen that in our research. We are drawing that conclusion from what we are seeing in the environment in general. With what’s happening economically with the country.

Lorraine Maikis (Merrill Lynch): Did you think that the baby boomers in fact, cutting back on spending? Do you have any regional differences in your comps that may show housing market impact?

Charles J. Kleman: The West Coast and the South West are down and down significantly. Some of our best stores are in the South West and they have been down for quite some time now. We have seen ups and downs in Florida. We have seen the North East been chugging along, so our differences regionally have been a lot like, what you expect to see from what you read around the country, but I don’t think we have seen anything new in that arena.