Welcome to the fourth quarter year-end Brown Shoe Company, Inc. earnings conference call. I would now like to turn the call over to Kenneth Golden, Director of Investor Relations.

Good morning everyone and welcome to the Brown Shoe fourth quarter and year-end 2008 financial results conference call. This call is also available to the public via webcast in accordance with the SEC's regulation FD. Before I turn the call over to Ronald Fromm, I'd like to remind you of the company's Safe Harbor language. During this call, the company will make certain forward-looking statements to help you better understand its financial results and competitive outlook. Discussion of the company's future plans and other statements in this call that are not current or historical facts are forward-looking statements. These involve known and unknown risks and uncertainties that could cause the actual results to materially differ from historical results or from any future results expressed or implied by forward-looking statements. Factors that could cause actual results to differ materially include those listed in our press release issued this morning and available on our 8-K filed prior to this call and other risk factors listed from time to time in the company's SEC reports. Copies of the company's reports are available online and from the company's Investor Relations Department. The company does not undertake any obligation or plan to update these forward-looking statements even though the situation may change. Now I’d like to turn the call over to Ronald Fromm, Chairman and CEO.

Thanks Kenneth, good morning everyone. Thank you for joining us today. With me today are Mark Hood, our Chief Financial Officer, Joseph Wood, President of Brown Shoe Retail, and joining us from our office in Italy is Diane Sullivan, our President and Chief Operating Officer. Following my opening remarks Diane, Mark, and Joseph will cover the quarter and then we’ll open it up for questions. The fourth quarter marked one of our most challenging periods in our company’s 130-year history. The continuation of the economic uncertainties and credit crisis drove a dramatic increase in the promotional activity of retailers throughout the quarter which had a decremental effect on our sales and profitability. While we are not satisfied we did deliver results within the adjusted guidance we laid out on our last call. However our GAAP results were also negatively impacted by a number of nonrecurring special costs including those related to initiatives that were previously announced as well as the goodwill and intangible asset impairment of $119.2 million after tax that were not forecasted in our guidance. The total of these charges was $141.5 million after tax or $3.40 per diluted share. Without the impact of these items our adjusted loss in the quarter was $11.5 million or $0.28 per share, at the midpoint of our $0.33 to $.023 per diluted share range which we provided on the third quarter results call. Mark will walk through these items with you in a few moments. Over the last few months we have taken actions to position our company for operating profitably and positive cash flow in what we expect to be a continuing challenging 2009. To this end we have improved our inventory positioning with aging well below the prior year. We have increased our financial flexibility with the expansion of…

Thanks Ronald, good morning. Our fourth quarter results included a number of charges as Ronald mentioned. Before I review the income statement, let me walk through the detail of what was incurred during the period. The comments that follow will relate to quarterly performance as well as our position at year-end. In total our net loss for the quarter was $153 million or $3.68 per diluted share. This included total after tax charges of $141.5 million or $3.40 per diluted share. As we mentioned in our press release this morning the largest portion is the noncash charge related to the impairment of goodwill and certain intangibles totaling $119.2 million or $2.87 per diluted share. This impairment resulted from the deterioration of general economic conditions and the resulting decline in our share price and capitalization. The remaining piece of nonrecurring charges totaled $22.3 million or $0.53 per diluted share and can be further broken down as follows, $19.1 million or $0.46 per diluted share in costs related to our expense and capital containment initiatives including our work force reduction program. The amount of $1.7 million or $0.04 per diluted share and costs for the headquarters consolidation. There will be no material carryover of costs for either of these initiatives in 2009, $1.5 million or $0.03 per diluted share for start up costs related to our IT initiatives. Adjusting to exclude these impairment, restructuring, and other special charges, our net loss in the quarter was $11.5 million or $0.28 per diluted share. I would refer you to schedule four of our press release this morning for a full reconciliation of our net earnings to adjusted net earnings for the fourth quarter and full year. Turning to a full review of the income statement, consolidated net sales for the quarter totaled $521 million,…

Thanks Mark, and good morning. As both Ronald and Mark have indicated the fourth quarter did prove to be challenging. As I stated on our third quarter conference call our goals going into the fourth quarter were to focus on three areas. First of all to drive our core businesses of Famous, Naturalizer, and Dr. Scholl’s and then to ensure that we allocated the talent and resources to get our new business opportunities launched. Secondly manage operating expenses very tightly and third manage our inventory throughout the supply chain with even more stringent guidelines. We accomplished most of these goals. In particular we were successful in clearing inventory as we capitalized on the natural traffic of the holiday season and took timely markdowns across our retail and wholesale businesses. As a result we are beginning 2009 in a solid inventory position with less overall inventory per door and better aging across our portfolio. Looking at our wholesale business in total wholesale sales declined 25.1% in the quarter to $142.7 million bringing the full year to down roughly 10%. Without the disruption in shipping which Mark described, sales would have been in line with our previous guidance. The lower sales in the quarter as well as increased markdowns and allowances, resulted in an operating loss of $3.4 million before impairment, restructuring, and other special charges compared to operating earnings of $18.5 million last year. We experienced sales declines across most of our brands as shipments were effected by weak consumer demand that drove the increased promotional activity and tightened up [open to buy] at all of our major customers. Gross margins in the quarter reflected these challenges, with the majority of the margin erosion coming from higher markdowns and allowances and the balance the result of mix change. While small in…

Thank you Diane, and good morning. Famous Footwear reported a disappointing fourth quarter driven by the heightened promotional activity during the holiday which effected our profitability. Our objectives heading into the quarter were to remain competitive, keep market share, and end the year with a clean inventory. We did accomplish these goals. To this point our promotional vehicles were successful with our same store sales decline of 3.6%. A top three performance according to the FDRA. Inventory at year end was down on an average store basis from the prior year and our aged inventory at year end was once again at a historical low. As a result our inventories are in good shape as we begin 2009. In total fourth quarter net sales were $312.3 million, increasing $1.6 million or 0.5% from last year. This increase was driven by the addition of 64 net new doors, and as was mentioned was offset by a 3.6% decline in comparable store sales. Within our comparable store sales, areas effected most by the subprime mortgage crisis, especially Arizona, California, Nevada, and Florida, where we do have a high concentration of stores experienced particularly weak performances which lowered our overall rate of comp growth by 110 basis points. Gross margin declined by 280 basis points and combined with increased costs related to operating 64 additional stores, led to an operating loss of $4.6 million excluding impairment, restructuring, and other special charges in the quarter which compares to an operating profit of $13.4 million last year. Regarding our sales metrics, customer traffic and conversion continue to be challenging during the fourth quarter. Traffic was down 2.8% from last year and conversion was down 1.8%. [Pairs] per transaction were basically flat while average unit retails rose 2.3% even with the additional promotional activity. On a…

Thanks Joseph, let me close by stating the obvious, it is a challenging environment and it was a disappointing year. At the same time I hope that you can hear throughout our conversations here this morning about our optimism, about our verticalization efforts particularly the work we’re doing with our new branded launches and we expect those to make contribution throughout 2009 and going on in the years to come. With that, I will open it up to questions.

(Operator Instructions) Your first question comes from the line of Scott Krasik - C.L. King & Associates Scott Krasik - C.L. King & Associates: What’s the dollar contribution or what’s the range you could sort of lay out for us, contribution in terms of wholesale from the new brands, Fergie, Fergalicious, Edelman, etc.

In terms of for 2009 we expect those brands as well as a number of other initiatives across the enterprise to probably I’d say somewhere in the range of $50 to $60 million I think is kind of what we’re thinking about with those new launches. Scott Krasik - C.L. King & Associates: In terms of distribution for Fergie and then Fergalicious excluding Famous.

Actually the door count that I talked about on our last call continues to hold and actually has grown so net of Famous doors we’re still in the range of well over 1,000 for Fergalicious and Fergie less obviously because of the price point, that’s a brand that’s targeted for department stores and so that’s a little over 200 doors that Fergie will be in so we’re really trying to be very thoughtful and manage the launch of, and the opportunity for both of these brands at very distinct consumer segments and making sure we’re in the right channels as well. Scott Krasik - C.L. King & Associates: In terms of this idea of managing the level of promotions versus the comps I guess January is a good example when you pulled back on the promotion the comp declined double-digits so what gives you confidence that even though your inventories are down a couple percent that once you pull back on the promotions that the comps don’t continue to decline in that high single, double-digit range.

Well as I mentioned we’re really cutting back on BOGO, there are, BOGO is a very good vehicle for us during high traffic timeframes however the other parts of the year its really just reduces inventory. We’ll replace the BOGO weeks that we’re cutting back on on other promotional initiatives that we have really aimed more at single pair promotions during the year so we really are cutting back dramatic on the number of BOGO weeks. Its just becoming over used and isn’t the vehicle we’d like to use other then the main drive times of the year. Scott Krasik - C.L. King & Associates: Are you sort of planning that once on the weeks where you are not BOGO year over year that you are planning for lower comps then what we’ve seen.

No we’re not, we’re really replacing those BOGO weeks with what we consider our better value and promotional vehicles to the consumer.

Your next question comes from the line of Christopher Svezia - Susquehanna Financial Group

With regards to inventories down 26 per store at Famous but given that you’re looking at a mid single-digit decline in comp can you help us understand where this inventory is concentrated because for us it looks like it may be a little bit higher and then with us hearing that you would be holding fewer promotions, where could this inventory be concentrated.

Well the inventory really, the shift right now, the inventory is really concentrated in several areas. Obviously our athletic business has and continues to be extremely strong not only in athletic but in our skate business so we have switched our investment from a women’s business that continues to struggle in the industry. So we have shifted that over into athletic and skate at the current timeframe.

So could you give us a percentage of how much of your revenues is now coming from athletic versus the non athletic side, is that possible.

Well yes, historically and even now athletic runs between 43% and 45% of our business but even in good times that business, that really doesn’t fluctuate more then 5% so it can run anywhere from a low of 43 to a high of 50. Right now its running ahead of the 43 pace, we anticipate it continuing to grow as we go into future quarters.

As far as the wholesale business could you help us understand how the new businesses would flow through and would it be fair for us to assume that maybe wholesale revenues are going to be declining quite steeply during the first half, and see some kind of moderate recovery during the second half.

I wouldn’t say the first half is steep and I’ll sort of give you a little bit of color and ask Mark to step in here as well, in our first half because we are launching Fergalicious and Fergie, some of that will be, certainly we’ll see in the first half of the year and with Libby, but we’re making sure again that we flow the goods right, get a good read on what the consumer reacts to, is going to react to and then as we move into the back half of the year and know a little more and feel a little more aggressive about where we want to place our bets. So I would say generally first half is going to continue to be challenging. We look at the second quarter as being probably the bigger question and then the back half improving somewhat.

I think you said it nicely Diane and then again I think as to reiterate what we talked about in our guidance section about full year guidance being high single-digit declines in some of our existing brands and the decline of our private label business, and as you mentioned earlier significant growth opportunities from our new brand launches.

Your next question comes from the line of Heather Boksen - Sidoti & Company Heather Boksen - Sidoti & Company: You talked a little bit about planning some gross margin improvement especially in the back half of 2009 in the wholesale group, is that really just sourcing gains or is there some merchandise margin improvement do you think you can get there as well.

I think it’s a mix of all of those things. First of all product costs, costs that we’re really looking right now at paying and going into the back half of the year have come down after the highs that we experienced in 2008 so we’re certainly seeing the real costs come down. The second thing is as we again with good inventory position and as we manage the flow good, we are also expecting that there should be reduced markdowns and allowances in the mix as well. So we think that’s the second piece of it. And then the third piece is the way we’ve been really thinking about this good, better, best pricing strategy and making sure that we have across all of our brands, very sharp entry price points because we really do see the consumer searching for value. So its kind of the combination of those three kinds of things that we expect, why we expect to see better gross margin rates.

Your next question comes from the line of Sam Poser - Sterne, Agee & Leach Sam Poser - Sterne, Agee & Leach: I have a question regarding your commentary that you made both on the call and in your release about being able to be operating earnings positive in 2009, how much of a, based on what you said about the SG&A increase and I guess first of all should we exclude that IT number and make that non-GAAP, nonrecurring based on the guidance you gave and number two, in [inaudible] it looks to me like a significant increase in gross margin at least towards the back half of the year.

I think first question relative to SG&A I think we have not yet determined whether in 2009 we’re going to report the IT as a separate line item or not. The guidance range that I gave you 39% to 40% was inclusive of the IT spending. The IT spend was $7 to $9 million and its in those numbers. In terms of gross margin I think Diane commented on that as well as Joseph’s commentary relative to the margin impact of different promotional vehicles. Sam Poser - Sterne, Agee & Leach: Can you reiterate that please.

I think Diane said that we would expect gross margin opportunities in the wholesale business as a result of the pricing elements we’re seeing from the factory shifts, the change of mix within brands on the good, better, best strategy would add to that, the mix of branded business versus non branded business. On the retail side Joseph talked about fewer weeks of BOGO, BOGO impacts gross margin negatively so we would expect to have an overall better margin in Famous Footwear. Sam Poser - Sterne, Agee & Leach: You mentioned that you had to pay some markdown money to I assume to the department stores this year, how do you reduce, how do you make sure that does not happen to the degree it happened this year again within 2009.

Well you know how tough that can be but what we’re, again the attack plan is a couple of things. Really continuing to watch even more carefully how we’re flowing goods and the timelier rate of markdowns as we can and allowances we can. The second thing is to make sure that pricing strategy takes hold because if we can have a couple of key big driver items at really good value price points for each one of our brands we think that is the right way to go and I guess the other thing, the comparison for fall 2008 is so tough when you really think about the perfect storm that it was with price increases going up, retail going up, consumer demand falling, traffic falling, so it was kind of a confluence of a lot of different events that put enormous pressure I think on everybody in the industry. So anyway, it is those things that I think are going to be the keys. And obviously we have great product that sells.

I think the other big macro effect here is if you look at the industry and I think Brown resembles the industry all of our major accounts have planned down their purchasing and will reduce their flow of purchasing certainly into the first half but we would expect that in the second half as well. I think that there’ll be exceptions to that brand by brand as we have seen with the significant and broad spread support for our launches and the initiatives as we’ve gone through the shows here as we look at the initiatives for the second half. But I assume that that means we’re going to be taking market share. I don’t expect to have more inventory out there which really led to the dramatic promotional activity. It all starts with too much inventory on the shelves and not enough customers coming into the doors. I think that we’re all going to prepare ourselves for a very difficult environment which means we in essence expect traffic to continue to be challenging and inventories will be planned accordingly. Sam Poser - Sterne, Agee & Leach: Again, on the $50 to $60 million that you expect on the new brand contribution, the flow of that I would guess would be two-thirds first half, one third second, am I thinking about that right because of the launch or even two-thirds first quarter.

You know, I want to double check that for you to make sure I give you the facts but I would probably lean the other way a little bit. But we’ll follow up with you and make sure you get what you need.

Your next question comes from the line of Jillian Caruthers – Johnson Rice Jillian Caruthers – Johnson Rice : I know you’ve recently launched Libby Edelman in the Famous Footwear channel could you talk about just moving more of your actual house brands into the Famous Footwear channel, what’s promoting that move, is it just given a lack of wholesale customers and just if you could maybe quantify the percentage of mix of those brands in the Famous Footwear channel.

There has been obviously a conscious effort to verticalize a lot of our business. With the success that we’ve had on, obviously Naturalizer has had a great year but with the launch of two new brands, especially Libby and now we’re launching this week Fergalicious in all of our stores. It has been very successful. We continue to grow that business with a focus on growing our internal brands. Currently our brands here at Brown Shoe represent about 15% of our total business. It doesn’t sound like its that much but if you also take a look at the fact if you back out athletic our internal brands become more like 26% 27% of our non athletic business. So its become a very important and profitable part of our business and will continue to grow and as the quarters and years go by here. Jillian Caruthers – Johnson Rice : How does that compare to a year ago numbers, just to see how much its grown over the past year.

Let me give you more of a five year history, its growing at about 10% to 15% rate per year. So without getting into pure numbers, it has been around a 15% growth internally on a yearly basis.

I think the other thing that we really believe is important too is the brand like Fergalicious comes in now into the Famous Footwear portfolio and its now speaking to a different customer as well so a junior oriented customer where we’ve had the rest of our brands in our portfolio has been speaking more to the traditional and update in classic side as well.

The other important thing to remember is that as a matter of policy we do not allocate product between brands, that is Famous’ decision as to what brands they carry and what price points they do. What we’ve done as an organization under Diane’s leadership is really heighten our design capability and our consumer insight capability to make sure that we now have brands that we can target specifically for the Famous customer and we think that has paid off dividends already in the brands like Dr. Scholl’s, that we’ve had in the stores probably going on two years now. And we continue to believe that its really design centered and consumer focused on the segmentation that we believe is the reason we can drive more success in the Famous chain. Jillian Caruthers – Johnson Rice : On that, some of these new brands is it exclusive to Famous Footwear or are you selling these products to some of your other mid tier, off price channels that work through the wholesale chains.

There isn’t anything that’s exclusive to Famous Footwear, even Libby Edelman, that brand while it’s a good portion of its focus is targeted to Famous, she was also on Home Shopping Network so other then that one the rest of them are broadly based brands.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you again for joining us. We appreciate your support and look forward to speaking with you when we report first quarter results in May.