PVH 2Q15 Earnings Call Notes

Strong performance in Europe and China, weak performance in Korea and Brazil

“By region, we are seeing very strong performance for Europe and China for both brands. In Korea and Brazil, where we have a large Calvin Klein business, sales trends continue to be challenging as we are being negatively impacted by the macroeconomic environment for each of those countries.”

Later back to school is making it difficult to read the wholesale business

“In North America, we are dealing with a later back-to-school selling season, due to a weak later Labor Day Holiday, which is making it more difficult to read the business. Our retail same-store sales are running negative low-single digit at Calvin Klein and negative mid-single digit at Tommy Hilfiger. Those two businesses are running on plan given the later back-to-school season and are continue to be impacted by international tourist traffic and spending”

You can’t help but be a little bit more conservative watching what’s gone on with the stock market

“The challenge is – trying to operate that business is, trying to get beyond a lot of the noise that’s going on from the stock market point of view and where we see the business moving and going. So you can’t help, but look at that business and be a little bit more conservative about how we project that business out both through the balance of this year and then moving into 2016 and beyond. So it just gives us pause.’

Valuations are high but we still want to buy the Hilfiger license that we don’t own in China

“on Tommy, potentially we’re acquiring the 55% of the Tommy Hilfiger license business that we don’t own throughout China…I think from a valuation point of view, although that market has taken hits – if you look at PEs or valuations (23:28), they’re still relatively high. So we will be diligent as we look at that. But, clearly, one of our goals would be to own that business sooner rather than later”

It’s tough to read how back to school is going

“I think – geographically, I think it’s much more of a Northeast, Southeast phenomenon with the whole back-to-school being somewhat later. I think as you move across the country, some of those schools come back earlier. And since most of our retailers and ourselves have a concentration of business in those regions, it’s having a significant impact on trying to read business. I think when we get to September 15 or whatever, we’ll have a real clear understanding of how this back-to-school period is trending”

Favorable shift in Chinese New Year for Q4

“we are going to benefit in the fourth quarter like everyone else from early Chinese New Year, which really impacts a lot of the Asia markets. It’s about two weeks to three weeks earlier this year and you’ll get – you get two things happening; you’ll get earlier actual retail sales in the stores that we are operating, but also because of the early Chinese New Year, wholesale shipments are falling into January out of February.’

How do you raise prices in a world facing deflationary pressure

“the challenge, the biggest challenge we’re looking at is, how aggressive to raise prices particularly in a world, as you look out there that is facing extraordinary deflationary pressure in just general terms across a – the ways most economists speak, the biggest concern is deflation, not inflation.”

The biggest headwind we face is currency

“the biggest headwind we face, cut through it all, is currencies. ”

We’re seeing positive trends in Europe but also cost increases

“Europe. It has gone through some macro issues, but we’re actually seeing positive sales trends in Europe. We believe that economy is coming back and that consumer is re-engaging. The challenge we are facing in Europe for 2016 will be cost increases that are double-digit cost increases”

Planning to grow China mid single digits

Clearly, this is not the heydays of three years ago [in China] where, from 2007 to 2010, the business grew 15% topline. We are planning the business to grow more mid-single-digits. I think that’s reasonable.”

Biggest thing we’re dealing with is uncertainty

“I guess the biggest thing we’re dealing with is uncertainty and what that does to – potentially does to the consumer, how that forces us to plan our business, and reacting to the macro-environment”

60% of our marketing budget is directed at digital

“I would say between Calvin and Tommy, 60% of our marketing budget are directed at digital marketing, and connecting with the consumer there, converting them to our in-store platforms, our wholesale customers’ in-store – online platforms or our own brick-and-mortar stores as well.”

Important to get into other retailers besides department stores to connect with younger consumers

“I don’t think it’s any surprise to anyone that department stores tend to skew somewhat older…
So the opportunity with some of the retailers you talked about, Urban Outfitters, with Topshop, particularly The Buckle as we move forward, some other players Opening Ceremony, you mentioned, it’s as much – it’s as important as it is commercially. It’s also very important from a brand positioning point of view how we connect with the younger consumer, how we connect digitally, how we sell online for that consumer.”

European tourism is booming with the weak Euro

“our Chinese consumer or Asia consumer instead of being in the United States is more so in Europe. And as you – I was in Paris and I was in Amsterdam this last month, you could see the tourism boom that’s going on there and helping their economy.”

When you go on that show with Cramer it does get a little crazy at times

“when you’re on that show with Jim Cramer, it does get a little crazy at times.”

Amazon is good about getting us the brand experience on their site

“Our Calvin Klein Underwear business in particular is by far the largest selling underwear on the Amazon site, as you would expect giving them that product category. So they’re a great partner. We really manage that very closely from – making sure it’s brand enhancing. We just don’t want goods on the site. We want the brand experience on the site. And they’ve been very good at getting us that. ”

50% of outlet sales are going to be from tourists?

“if you’re a global player that really attracts a global consumer, in those centers like Orlando or Harriman, your customer base in those centers for those brands, 50% of the credit card sales are international tourists from South America, Europe and Asia. “

The Gap 2Q15 Earnings Call Notes

Old Navy is the model for the rest of the company

“Old Navy’s consistency continues to be a thing of beauty. It sits on a platform of product process that they have built over the last couple of years and now are pretty relentlessly executing season after season. It’s those same product processes that we are pretty follow-on in installing in Gap and Banana Republic and as I’ve said before, Old Navy remains our proof point for building products, executing trend, delivering on brand, on quality, on fit product consistency for the rest of the company.”

I’m not going to stand at the plate and call which fence we’re going to hit it over

“I’m not going to stand up at the plate and call which fence we’re going to hit it over, that’s not who I am, but I am confident that Gap will make significant progress in spring and very pleased with what I’ve seen in the women’s assortment and the turnaround in the women’s assortment.”

We will be going to in season open

“For the first time, we will be going to in season open in some of our key product programs and therefore able to get back in after we read the business in season with significant quantities of units. This is obviously an important capability for us. We are building this across the entire compan”

Continue to be very bullish on China

“we are continuing to be very bullish on our opportunity in China. We will process the currency devaluation, and the team is working on that right now. I don’t see that really giving us any significant headwinds as we think about the continued growth of the China business.”

There’s a lot of noise, but the consumer has confidence

“I would just like to address the fact that there is a lot of noise really out there right now around the apparel sector. And just so you know my perspective, I shut it out because from where I sit across all of our businesses, our job is to deliver regardless of the noise that’s out there today and what I see is, I see a consumer who has confidence, I see dollars being spent and I see an opportunity for us to continue to get more than our fair share, as I look forward and I am very optimistic”

We’re still a ways out from in season capabilities, but we’re moving quickly

“I’m not going to give you specific numbers here because we’re actually still a ways out and we are obviously trying to build this as quickly as we can and use it as quickly as we can.”

We’re fairly confident that denim has hit bottom

“we are pretty confident that the Denim cycle has hit bottom and it has been coming back over the last several months.”

The best marketing is a good product

“I feel pretty strongly about which is the best marketing is good product. And if I look at Gap as an example, we drove the strong business back a couple of years ago in spring of 2012 with modest marketing but exceptional product. And so what I can say is that, as we feel better about the product that will help us think about the marketing that we’re willing to put behind it.”

Fossil 2Q15 Earnings Call Notes

Changing consumer patterns

“we are adjusting to changing consumer shopping patterns and preferences as well as the natural progression of brands in their lifecycles. We also see technology emerging as the latest trend in fashion, with the growing interest in wearable technology inspiring new entrants into the watch space.”

growth in Americas offset by slight declines in Europe and Asia

“During the second quarter, our multi-brand watch portfolio was flat to last year, a disappointing performance for the quarter as growth in the Americas was offset by slight declines in Europe and Asia compared to last year.”

Germany not as strong, China continues to be tough

“Our business in Germany was not as strong as we expected, while we did see some strong double-digit growth in France. In Asia, our business grew, but did not meet our expectations. The MERS outbreak in South Korea and economic downturns affecting Hong Kong and Macau are putting pressure on our near-term results. China continues to be tough with economic, political and distribution challenges there making it difficult to drive near-term growth. On a positive note, markets like Japan, Australia and India continue to grow, with India posting strong double-digit growth in the quarter.”

Headwinds caused by new entrants and brand lifecycles

“As we entered the year, we identified several disruptive factors that were going to make 2015 challenging. We expected visibility would be difficult with new entrants moving into our market. While we feel this will energize the category in the long-term as we add technology to our products, the near-term implications seem to be playing out. Also, the natural ebbs and flows of brands in their lifecycles can create volatility in sales patterns as consumer preferences evolve around the globe”

We believe that we can be at the intersection of technology and fashion

“We continue to believe that with our great design capabilities, scale and world class portfolio of brands, we can be the point where technology and great fashion come together. We believe that we can win here, where others can’t. ”

Europe’s weakness was the standout for us

“Europe was the standout for us. It was certainly weaker than we expected in the second quarter and that largely drove the second quarter, where our sales missed the top or the bottom of our range. So that’s number one, is that we just missed our sales expectations for the second quarter.”

Kors brand is still extremely productive, but obviously growth has moderated

“we look at Kors globally and the opportunity. If you just look at the pure brand power, the brand is still extremely productive. It’s the most productive brand we have and it’s got the best metrics in terms of sell-through sales per foot. It’s just a huge number. So, obviously, growth has moderated a bit. We did have growth globally in Kors, with jewelry having a big increase and we think that will continue. We do think now that jewelry can be a much larger number than we thought in the past. We also – they are ramping up their activities in men’s and we have got a whole initiative around automatics.”

Handbags are an emotional and aspirational business

“The one thing to keep in mind is the handbags is a very emotional and aspirational business and the category that will benefit the most from the Fossil brand getting stronger is the handbag category.”

Technology and wearables have taken some oxygen out of the swiss business

“I think technology and the whole idea of wearables I think has taken some of the oxygen out of the Swiss business…If you look at the global watch market which we are relatively small share now and want to be a larger share, a very significant portion of the global traditional watch business is Swiss-made. So, long-term, we want to play in that environment. So, it still remains a big white space for us.”

Three categories of wearable technology

“when we talk about wearables it’s not just smart watches. There is actually – it’s kind of crystallized into three different categories. First of all, there is the smart watch, which is the Android digital screen watch, which it looks really good for fall. And we think over the next couple of years, will get better as it gets smaller and more robust, technology gets better. We think that’s got long-term legs as it continues to improve. And we also have non-display items like our bracelets, more like jewelry that are – we think has the capability of creating an entirely new accessories category based around technology.

And then the third, and probably most significant long-term, is what we call smarter watches, which is just adding chips and additional functionality to existing watches. So we are launching that this year, which is to watch it looks just like a regular analog watch but does have a chip in it that gives measures, activity and sleep and also has notifications in it. So to a certain extent, you could say that what we are doing is moving towards we think someday every watch we make will have some type of technology in it.”

Under Armour 2Q15 Earnings Call Notes

Our athletes teach us great lessons for business

“These three athletes have combined to teach us one incredibly valuable lesson that we need to think bigger. For Stephan Curry, Misty Copeland and Jordan Speith, being a great basketball player, principal Ballerina and PGA Golfer was rooted in their ability to see beyond to be prepared to not just be great but to be extraordinary, to plan and practice but also know when to take the risk. Our lessons out of this are incredibly relevant to this moment in time for the Under Armour brand.”

More than change how athletes dress, change how they live

“our athlete success pushes us to see beyond just maximizing the revenue opportunities in any given quarter. It forces us to think clearly about what we need to do better and how we need to organize to be more than just an American sports brand to go from changing the way athletes dress to changing the way athletes live.

Being aggressive, young and fearless can be a deadly combination

“there is a bigger takeaway for our company and all of this, we’ve learned from these athletes not only about the preparation it takes the great but the added level of commitment it takes to be truly special. All three of these athletes started as clear underdogs, they were able to put themselves in a position where their skills and focus enable them to transcender sport. All of them have proven as Jordan Spieth stated following his master’s victory when asked why he chose Under Armour. That being aggressive, young and fearless can be a deadly combination.”

Brand awareness doesn’t mean that you’re all of a sudden flooded with orders

“we’re proud of what that means but it’s not a one way ticket to all the sudden you’ve arrived but there is a lot of work for us to be done and there is a lot more one thing I learned a long time ago when I mean with the first time an Under Armour logo popped up on the front cover of a US Today’s sports page and I thought I was walking the office and the place to be flooded with orders it’s just not the way it goes.”

What an awesome quote

“And so brands are built on consistency, consistency is built in trust and trust is built in drops and is lost in buckets.”

Nike FY 4Q15 Earnings Call Notes

Nike is a growth company

“We’ve shown once again that NIKE is a growth company. Here are the fiscal ’15 highlights. NIKE, Inc. revenues grew 10% to $30.6 billion, despite significant FX headwinds. On a currency neutral basis, NIKE, Inc. revenues grew 14%. Gross margin increased 120 basis points to 46%. Earnings per share rose 25% to $3.70 and we delivered ROIC of 28%. These are the quality results that our shareholders have come to expect from us and that we demand from ourselves. One of the reasons we are able to deliver results like these are the talented people who work at NIKE around the world.”

Nike continues to build digital

“At NIKE innovation comes in many forms and our growing digital ecosystem is the great example. Consumers are increasingly connected and utilizing premium personal digital services. Digital is an accelerator of growth that is shaping everything we do. We are building deep connections to consumers with digital services and communities to driving rapid expansion of our e-commerce business”

Always moving forward

“What I just recapped is by no means an exhaustive list, but it clearly shows how much ground this company can cover in just one year. And while we’re pleased with this year’s results, at NIKE, we’re always moving forward. We’re relentless in our pursuit to get better and we see opportunities that no one else can and most importantly we have the resources and the talented team to deliver.”

Put the consumer at the center

“The success in our business is a natural outcome of putting the consumer at the center of everything we do, our connection with consumers strengthens our brand every day from our own retail to wholesale partners, from in store to online, from digital experiences to unforgettable live events. It’s those deep and authentic connections that power the NIKE Brand around the world.’

There are some headwinds out there, but we’re confident we can keep expanding margin

“There are some headwinds out there of course with labor inflation and FX, but on the flipside, we’ve done a pretty consistent job of raising average gross selling prices, our DTC business of course is accretive. So overall on margin, we’re pretty confident we can keep moving margin forward.”

Passing of the trade bill and new manufacturing technologies could shift the global supply chain

“the passing of the TPA was obviously an important step toward what we hope is a final approval of TPP and as we’ve said before as you know, this will help us to accelerate the work that we’re doing with advanced manufacturing, will help us expand our business overall, I think certainly give us an opportunity to build local manufacturing here in the United States, can put us closer to market events, some of the innovation particularly in the area of customization. We are in the middle – Don had mentioned this briefly, but scaling our advanced manufacturing initiatives, which we’ve really been working on over the past three to four years, so you’re going to start see those scale, but opportunity to get some – translate some duty relief into investing in our advanced manufacturing supply chain efforts here in the United States is going to be significant we hope, I mean, that’s our goal. So that the idea is that we will accelerate and we will see some real benefits from that. I think you’re going to see the overall supply chain geographically shift a bit here and there with the advancements of new manufacturing innovation. That is a major priority for NIKE. It will give us the flexibility to create more localized manufacturing overtime, and that will put us closer to market and again allow us to advance products, particularly in the customization area and to meet more local demand as well.”

“brand accretive”

‘ we feel very confident that we’re going to be working through that inventory in a way that’s brand accretive and is not going to be problematic from a profitability standpoint.”

Perry Ellis FY 1Q16 Earnings Call Notes

Men’s business very strong

“when we have to look at the business wide segment, the men’s business as you heard from J.C. Penney was very strong and I haven’t been able to read the transcript from the other retailers. But men’s continues to do extremely well, active wears is doing well, ath-leisure still continues to be strong and our golf business which has basically kicked in and as I mentioned Nike Swim are all doing extremely well, as a whole within the stores.”

WalMart has intensified health and wellness business

“we’re seeing Wal-Mart has intensified the whole health and wellness business and especially on making a strong commitment to the whole ath-leisure active wear business. So I think that halo effect than the in-store developments of what they’re doing has helped Ben Hogan as well as our product. We worked very closely with Wal-Mart in developing all of our business.’

Ralph Lauren FY 4Q15 Earnings Call Notes

Continue to experience impact of strong dollar/lower tourist traffic

“While we continue to experience the negative impact of a strengthening U.S. dollar and lower tourist traffic, our product across core and emerging categories was well received and we achieved strong sell-through in most regions.”

Raising prices, negotiating lower costs in response to currency impacts

“Moving to foreign exchange, we have taken decisive actions to mitigate the negative currency impacts. First we are raising prices in certain markets that have been impacted by currency devaluation, including Japan, Canada, Australia and Europe. These pricing actions are generally in the mid-to-high single-digit range and will be effective in the back half of the fiscal year.

Second, our supply chain organization has negotiated lower cost across our manufacturing base as a result of lower raw material and oil prices as well as the strength of the U.S. dollar. These lower costs will also become effective in the back half of the fiscal year. Finally we will reduce operating cost by restructuring the organization.”

Better margin outlook for FY 17, but negative side is FX hedges rolling off

“On the second question, in terms of what does it mean for fiscal 2017, I think that there’s going to be a couple of different things happening in fiscal 2017 and it’s premature for us to give guidance that far out. But obviously we would expect to see a full year impact of the pricing action that we’re taking, which would be a positive. We would expect to see a full year impact of the cost reductions that we’re taking, which would be a positive, and we would expect to see a ramp-up of the restructuring savings, which would be a positive. And so all of those would lead to a better operating margin outlook in 2017.

On the negative side, we have hedged our FX exposure. And so as those hedges roll off, we will have a year-on-year hedge FX hurt continuing into fiscal 2017 from the portion of the business that was hedged in fiscal 2016. ”

Shared service group

“So the supply chain and the back office will continue to be operated as they are today by our shared service group. So we have a shared service group today that handles global manufacturing and supply chain, that handles finance, that handles HR, that handles real estate, that handles operational capabilities, and that will continue because we believe that those groups are better leveraged across the entire enterprise and we don’t intend to disrupt that.”

Fossil 1Q15 Earnings Call Notes

Fossil digital products in stores for holiday 2015

“When it comes to connected accessories, we feel very strongly about both our progress and our prospects to be a strong catalyst for growth in the category. There’s a lot of consumer interest in the space and a wide diversity of perspectives on the role that smart watches and other connected accessories will play in the market. With our partnerships with Google and Intel, coupled with our ability to create fashion at scale, we believe we have a significant opportunity as the convergence of fashion and technology enables us to bring compelling tech-enhanced accessories to the consumer. We continue to make progress, and we look forward to launching later this year with FOSSIL products in stores for holiday 2015.”

Wholesale trends were mixed in the US

“Our retail business continues to improve with positive comps across the fleet. While wholesale sell-in increase U.S. department store sell-out trends were mixed, with some brands accelerating, while others have not been as strong. There’s a lot of this disruption in this market right now with new entrants and existing brands that are maturing.”

Newcomers (i.e. Apple) are entering our market

“As we said before, nearer-term challenges remain. Newcomers are entering our market, and managing the natural ebbs and flows of brands in the life cycle is an imperfect science. Consumer shopping behaviors are changing at an unprecedented rate, and we continue to be cautious in the United States. This is our most developed market, and we are actively engaged in protecting our position, seeking new opportunities for growth and working to replicate our great success here in international markets.”

Foreign currency volatility means that guidance range needs to be expanded

“The only significant change to our outlook for this year relates to foreign currencies. While the U.S. dollar strengthened further in the quarter, it has weakened significantly in the last couple of weeks. And we are updating our outlook to reflect that volatility using a range that roughly aligns with our initial 2015 guidance rate on the high side and more current prevailing rates on the low side.”

We’re seeing a very disruptive phase. Obviously, there’s a new competitor in the market, so we’re not sure what that means

“the market’s in a very disruptive phase. We’re seeing — in our wholesale partners in the United States, we actually are seeing, as mentioned, their declining business there. Keep in mind also that first quarter is a relatively small part of the year. We still expect, and always have, is that 40% of the retail sales in watches happen in the fourth quarter. So — but having said that, we’re seeing declines in there and also there’s a lot of disruption. Obviously, there’s a new entrant in the market. We’re not sure if there’s some impact on the consumers’ side to see what that new entrant’s products look like, et cetera, but they have yet to be seen.”

Consumers very very interested in convergence of fashion and technology

“We think we’re in a situation where consumers are very, very interested in this convergence of fashion and technology. So our objective is to put some of this technology, which could be notifications, sensors, other types of activity, in our watches that could add value. And when you leverage across the large scale, large numbers of units that we have, we could be in a situation where we could add a lot of value to the products, with not a lot of expense and have another series of disruptive growth in our business and really change the market in the U.S.”

Department stores are very interested in smart watches because the opportunity to grow the category is huge

“One of the things to keep in mind is the department stores are very interested in this because they perceive there to be consumer demand. But there’s another issue here also, which is, if you look at the — the watch business is about $65 billion globally, relatively a small industry, whereas, the tech industry, which includes smartphones, cell service, iPads, all the activity has gone to the technology world. The spending in there is huge. So just a small percentage of that spending and interest, when it comes in the watch business, it could have a huge impact on the watch business and make it much, much larger. A lot of that spending or most of it is not happening in the department store where our customers are. So our mission is really, in a disruptive way, to bring some of these technologies and ideas to the brands and enable us to add additional functionality at not a lot of cost could make the watch category more relevant and could bring a significant amount of sales into the channels that we sell to. And that’s what we’re working on, and we think it’s a pretty big opportunity.”

Kate Spade 1Q15 Earnings Call Notes

Still seeing promotional environment driven by departments stores

“So, first, relative to the environment that exists out there today, I think it’s fair to say that we are still seeing a promotional environment generally driven by the department stores. I think what we have continued to see is various department store groups, matching other sales from other retailers. There’s been an extension of key events. So this is certainly seeming to be an ongoing issue and that is why we have made building quality of sale such an important component of our 2015 activities.’

Going to be restricting participation in promotional activity

“we are going to be extracting ourselves from those sales going forward. So really what you’ll see for the balance of the year is extracting ourselves from most of that promotional activity, as it relates to the department store world. And I think in the past we’ve talked about us being kind of in the middle of the pack as it relates to promotional activity and I think what you are seeing already and certainly will see even to a greater degree as we move through the balance of the year is moving to the back of the pack and that is a really important part of our growth strategy overall.”

Going to have to be some retraining of the customer

“certainly there is going to be a retraining of the customer and that’s something that’s not going to be instantaneous. That said, we’re pleased with the early results of our promotional posture pull back”

Pery Ellis 4Q14 Earnings Call Notes

TPPA will provide duty free imports to major countries except China

“We continue to reduce cost across the portfolio. We have decided to consolidate our Beijing offices into our two other offices in China; in Guangzhou and Shanghai. As we continue to prepare for an eventual approval by the U.S. Senate of the Trans-Pacific partnership agreement or TPPA. When approved this agreement will provide for duty free imports and exports to major countries, except China and this will have a major implication for the apparel industry in the next three to five year period.”

Moving more and more production away from China

“Today our company imports as mainly units from Vietnam as we do from China. Going forward there will be an increase in imports of certain apparel products from countries other than China.”

Tough environment for retail companies

“s you are all aware apparel companies are operating in a very challenging environment with a consumer that has so many choices and so many avenues and channels to choose from.”

Receiving half as many goods through the west coast as they did before the port closure

“As you all know we faced external headwinds that were unique for the quarter, namely port closures in the United States and historic currency fluctuations. While we are pleased that an agreement has been reached in the port dispute we believe that it will take another month or so until the port is back to full normal operations.

In order to mitigate delays caused by the port closures we have redirected a significant portion of our inbound shipments to the East Coast and anticipate that our deliveries will be back on schedule by the second quarter of our fiscal ‘16. We are now receiving approximately 15% of our goods through the West Coast port as compared to 35% to 40% before the slowdown began.”

The port situation has definitely improved

“First of all the port situation has definitely improved. We are, I would say that by the end of May on time for Father’s Day, we will be caught up. As Anita mentioned, we have diverted and started diverting a lot of our concentration from the West Coast to the East Coast, back last year when we saw what was transpiring.”

Got e-commerce to standalone profitability

“this is the first year we were able to get e-com basically to a small profit on a standalone basis, unlike I would say most other platforms that are out there in the industry. We were able to do that by really focusing on specific merchandising assortment within each of the brands, within our e-commerce platform today and we focus on also reducing where there were some duplicative analytics, where we felt that we weren’t getting a payback and where we were able to invest in marketing and analytics that we sell to give us a higher e-commerce lift and better profitability.”

Price of oil lower has been helpful

“Product cost, has been favorably affected by the lower prices of synthetic, the lowering of oil prices, have lowered prices of polyester nylon et cetera. And cotton has been on a kind of decline for a couple of years. So basically that is an effective, in fact it will result in improved earnings. We haven’t been able to quantify that. It’s a small number but it’s a helpful number whatever it is.”

We’re moving to Africa

“Generally speaking, men’s companies are always in the forefront of the changes because we are more conservative “than ladies business” and the men business can take a longer delivery than ladies. So all the big companies today are moving to Africa, for example PVH has established office in Africa, so is Avis [ph] and we are in that process too. We have been buying in Africa for a number of years. So all this is going to be good for the apparel business and we also doing office consolidation whenever necessary like in China. We’re reducing our exposure in China, which will result in improved cost of goods to a degree.”