The firm did double its penetration at K&G. Of course it’s the lowest number to begin with and thats why the firm had such a significant increase in merchandise margins, and there is a lot of room to grew at K&G still.

At the other businesses, it’s very modest. The firm does that so that it’s transparent to both its employees and its customers.

In the third quarter you talked about the women’s side being a little weak. Could you comment on some of the operating issues there and your willingness to grow that business while the same-store sales are a little more modest?

The firm is experiencing a turnaround right now and, in fact, women’s wear and men’s wear is running equal in terms of same store sales numbers, so there has been a significant turn around. The reasons for this turnaround are mainly 2 things. The company has refocused on being a career store for women, just as it is for men focusing more on suits. Secondly the company has eliminated all the mark downs from the previous administration and that has a positive impact on sales as well as margins.

In terms of the K&G growth, are most of the storage going to go to existing markets or will you be expanding into some new markets as well?

It’s a 50/50 or slightly more in existing markets.

Can you comment about the shift that you mentioned in terms of the tuxedo business from Q2 into Q1 and quantify that? How much was the tuxedo business as a percent of 2006 full year business and what is the growth rates you’re expecting for full year 2007?

Relative to the first quarter, shifting that’s going on because of this 53 week moving into a 52 week fiscal period essentially means that the first week of the month of May will be realized in first quarter this year when normally that would be in the second quarter of the fiscal year. When the firm reports its comparable store sales that of course will be taken into consideration but when it reports its total sales increases you will note a significant increase and that’s why. Since tuxedo rental revenues are significantly more advantage from a gross margin standpoint, the company will have a significant impact to its first quarter numbers. The management has an estimate of 3 to 4 cents impacting the first quarter because of that shift and will get that back modestly or probably give it back half-half in the second and third quarter.

The tuxedo rental business in fiscal 2006 was about 6.4% of total sales. The firm is looking for it to be about 7.5% in fiscal 2007.

Do you expect that the margin in the tuxedo business to trend upward given some infrastructure that you also have in place?

Modestly.

Regarding the same store sales guidance, why you’re looking for an improvement in the U.S. business and what’s driving the strength in Canada and how sustainable you think that is?

On the U.S. difference primarily moving the quarter into the first quarter of the year has to do with that tuxedo rental business. Tuxedo rental business is counter seasonal to the business in the first half of the year, particularly the first quarter is the strongest because of that you’re seeing our the firm’s same store sales holding up or at least it looks like it’s trending stronger. The firm’s clothing business is anticipated to be similar in tone in the first quarter as it had been in the fourth quarter.

How you’re thinking about the long term EBIT margin of this business, as you get closer to the mid-teens that have been thrown out there before?

From the historical perspective the highest EBIT margin had been 10.6%. In 2005, it was 9.5% and so to generate 11.9% is almost beyond the management’s wildest expectations, and some of the results that the firm has been generating now at the EBIT level at K&G are far beyond its expectations when it made the acquisition. The company believes that it can grow out EBIT 50 basis points a year. The firm seems to be able to beat that, but that’s what it is looking for.

Could you comment on what’s took place at MW Cleaners and TwinHill in the fourth quarter and what is the outlook for 2007?

For the MW Cleaners, the same store sales increase was growing throughout the year. It seems to be doing a better job all the time. The firm believes that this economic model is substantial and is ready to invest more money and start to roll it out nationally, but it wants one more year of testing before it does that.

The management is little more excited about TwinHill than even MW Cleaners, because it is starting to get that geometric growth that you can get from that type of business, once you start getting large national accounts that you can use as referrals and the company is now in that position. The projection for 2007 is to double the topline over 2006, which was already a significant increase over 2005. The firm is real excited, and there are these plus marketing’s synergistic opportunities that as of now have not materialized, but are now in place.

On your website you’re marketing more to the big and tall. Is there also more emphasis on that in the core concept stores in terms of how you’re merchandising and what sizes you’re carrying?

The company is emphasizing big and tall in all of its divisions. One of the reasons that the firm has done well in Canada is because it has a bigger delta in big and tall in Canada than in its other divisions, but yes, all divisions are focused on big and tall. The firm carries extra longs from 40 or 42, up to 48. Then the company carries executive cuts in appropriate sizes. The firm carries what traditionally are thought of as big and tall clothing from size 48 to size 60 in regulars and longs.