Welcome to the fourth quarter fiscal 2014, G-III Apparel Group earnings conference call. My name is Loraine and I’ll be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Neal Nackman. Mr. Nackman, you may begin.

Thank you. Before we begin I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees and actual results might differ materially from those expressed or implied in forward-looking statements. The important factors that could cause actual results of operations or the financial condition of the company to differ are discussed in the documents filed by the company with the SEC. The company undertakes no duty to update any forward-looking statements. In addition, during the call we will refer to non-GAAP net income per share and to adjusted EBITDA, which are both non-GAAP financial measures. We've provided reconciliations of GAAP net income per share to non-GAAP net income per share, and GAAP net income to adjusted EBITDA in our press release and on our website. I will now turn the call over to our Chairman, President and Chief Executive Officer, Morris Goldfarb.

Good morning and thank you for joining us to discuss our fourth quarter and full year. With me today on the call are Wayne Miller, our Chief Operating Officer; Neal Nackman, our Chief Financial Officer; and Jeff Goldfarb, our Director of Strategic Planning. Neal will go through our financials in some detail in a few moments, but first I’d like to give you a few of our financial and business highlights. Fiscal 2014 was a great year for us. We continued to grow both sales and profits at a fast pace. We executed our strategic plan for Vilebrequin and acquired G.H. Bass. We performed well throughout the year and finished up with a record-breaking year. First, with respect to the first quarter, we grew sales to a record level of $473 million, an increase of 26% compared to last year’s fourth quarter. Net income per diluted share was $0.62 in this year’s fourth quarter, up 55% compared to $0.40 in last year’s fourth quarter. Our financial strength is particularly noteworthy as the retail environment was tough in January. There was a significant number of shopping days and shipping days that were lost or severely impacted as a result of winter storms. This hurt traffic in January at both our retail partners and our own retail stores. Despite these challenges, we performed well and finished up our season ahead of plan. Before I go into more detail about the quarter, I will provide you with a few highlights for the fiscal year. We grew our sales this year by 23% to $1.72 billion compared to $1.4 billion in the prior year. 65% of this growth was organic. We continued to have good momentum on the revenue line with opportunities for growth in nearly every category and in every tier of retail.…

Thank you, Morris. For the full fiscal year we reported net sales of $1.72 billion, an increase of 23% compared to last years net sales of $1.4 billion. Net sales of licensed products increased 17% to $1.15 billion from $982 million, and net sales of non-licensed products increased 22% to $343 million from $282 million. Net sales in our retail segment increased 52% to $298 million from a $196 million in the prior year. Increased net sales of our licensed products was primarily driven by increases in the net sales of Calvin Klein products, more significantly in our women's sportswear, suits, handbag and performance wear lines. Increased net sales of non-licensed products were primarily attributable to including the full year of net sales from our Vilebrequin business in the current year, compared to less than 5 months in the prior year. The increase in net sales of our retail segment was primary driven by the addition of the G.H. Bass & Co. business, which was acquired in November 2013, as well as by a combination of our higher store account and a compatible store sales increase of 10.7% in our Wilsons business. The overall gross margin percentage for the 2014 fiscal year was 34.1% compared to 32.3% in the prior year. Gross margin for the licensed product segment was 28.4% compared to 28.5% in the prior year. Gross margin percentage for the non-licensed product segment was 33% compared to 27.8% in the prior year, which was primarily attributable to our Vilebrequin business, which we owned for the full fiscal year and which operates at a higher gross margin percentage in our other non-licensed businesses. Gross margin percentage for the retail segment was 49.5% this year compared to 47.8% in the prior year. Gross profit percentage for this segment was positively…

Thank you Neal. Our performance in fiscal 2014 was excellent, and we continue to have solid opportunities for growth. We have strong platforms category by category that we can grow organically and leverage with additional brands. Some brands like Ivanka Trump, we expect to move more quickly with multi-category launches that drive scale into a brand in a way that very few companies can execute. We will also continue to look for acquisitions. We have access to capital, the skill set and the drive to build on what is already a strong track record of success in the M&A market. We believe we can drive meaningful improvement into already strong businesses like we are doing with Vilebrequin. We believe we can also take a business that is struggling and give it the help it needs to shine. We’ve done this with Wilsons and expect to accomplish this with Bass. Whether growth is organic or through acquisition, we believe we know how to add value. With great partners with our licensed stores and with our wholesale customers, we create product that resonates with consumers and that provides a superior price value equation at each tier of distribution. We are on the right path to continue to deliver value to our licensed stores, customers and shareholders. We’re grateful for your support and recognition and look forward to demonstrating our capabilities again in the year ahead. Thank you. Operator, we are now ready for some questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) And our first question comes from Erinn Murphy from Piper Jaffray. Please go ahead.

Great, thank you. Good morning. I guess my first question is just with respect to the first quarter guidance, very solid revenue guidance. The outlook obviously impacted by the dilution and part of Bass. Can you just parse out two things for us? Maybe first, just what visibility you have at this point from a top line perspective as we think about the first quarter and then second piece, from the dilution, can you just help us think how much of that, the loss per share is actually from G.H. Bass s revenue guidance specifically? Thanks.

Sure Erinn. Well, first quarter visibility is pretty strong. So, I mean we have on the wholesale side, we really got the full order book and really is a matter of executing and getting distribution. We certainly have on retail, we’ve got a month in. So we have a significant amount of visibility in terms of first quarter. In terms of the EPS impact, the G.H. Bass is a significant part of the reduction from the prior year. Without that we would have had a positive increase for the year quarter.

Okay, that’s helpful. I guess just circling back just real quickly on the visibility that you have, can you just parse out what you’re seeing from a either sell-through rate perspective in some of those key categories that are important in the spring season, dresses being one of them and then also just what have you seen from a just overall retail environment. Clearly the weather has still been not typical at this time of the year. Stores have still been shutting throughout the quarter. Just help us think about the retail traffic piece and then maybe the sell-through from the key categories for you in the first quarter.

Hi Erinn. The business in retail for the first quarter was a little difficult. We happened to have some shining stars. The best brand at retail in the dress business is Calvin Klein, sell-throughs are good. Some of our other brands struggle a little bit. We believe that our margin contribution to the retailer will be a little bit more than we had originally planned. The sell-throughs, because of the inclement weather and some of the store closing have definitely impacted retail business and we believe that we’ll have to cooperate more than we had originally planned. Overall the business for the future is great. Our order book is much more aggressive than its been in the past. We have several of the power brands in the industry and we expect to benefit from their performance and their placement, which is occurring right now. Spring is a very important season for dresses and that is pretty much the impact besides the vast piece or for our less than aggressive position for our first quarter.

Okay, thanks Mark, that’s really helpful. And then I guess, just Neal back to, as we think about the dilution, so obviously Q1, it sounds like that’s the entire loss per share, which would have been in earnings per share otherwise. As we get into the second quarter, should we also anticipate a similar level or just help us think about the balance of the year as you really integrate that business and work towards enhancing profitability.

So we are anticipating an advance for the full year will be slightly accretive to us, so we’ll pick up that loss throughout the balance of the year. Q2 will not have that kind of significant impact with the one proviso that we are in the process of integrating the business into our system and the timing of that will be important to note as to how that performance and the impact on the second quarter is.

Thank you. And our next question comes from Edward Yruma from KeyBanc. Please go ahead.

Hi, good morning and thanks for taking my question. Morris when you did the VBQ acquisition, it seems like one of the things that you did successfully was build some external management talent to help grow that business. I guess as you look at G.H. Bass, you know in terms of either the management team that you have or people that your eying, what kind of talent acquisitions do you need to make and what other kind of process improvements you need to make to get that business to perform.

What we’ve done pretty much out of the box is pretty much the same thing. We’ve replaced leadership. We hired a gentleman by the name of Scott Hoffman, which Scott is in effect our Chief Merchant at Bass. He’s got an extensive history in casual footwear and he is an excellent retailer. We replaced some of the field organization. We’ve hired several people that have origins from Abercrombie and we are seeing change already. The store appearance, I encourage you to walk in. If you have a history with the brand, I would encourage you to walk in and recognize the beginning of a transformation into a brand that has a lot of love behind it. And we’ve hired Joe Lawler who has been involved with us in the past. Joe is an incredible turnaround expert, so Joe has been consulting and spending a couple of weeks a month at Bass and helping in the transition and better than that, the organization in New York being much closer than we were at Vilebrequin has been influenced on how the process is moving and we’re very proud of the acquisition and hope to deliver results to you quickly.

Great. And sorry if I missed it earlier, but just wondering given the cold weather that you saw this winter, kind of what your new indications were for outerwear bookings for the back half. Kind of if you did see more retailer receptivity given obviously the strong sell-throughs they had this year. Thanks

We did have strong sell-throughs when the stores were opened. There’s very little you can do when you’re faced with store closings and it’s hard to make that up, so we had our share of store closings. The customer was unable to get there and see the value and satisfy the need for their coats this year, so there was kind of a unique balance. Sell-throughs when the customer were in the store were great. The dilution at retail, the markdowns that the retailer had to take were far less than the past. The return factor that was sometimes faced with is far more conservative than the past. So we wind up with a good year in the coat area and we project an increase for the coming year, partly because we were faced with store closings and partly because we have some additional brands and better designs for others and our bookings support the projections. Our bookings are strong going forward.

Great. Thanks so much. Best of luck.

Thank you.

Thank you. And our next question comes from Joan Payson from Barclays. Please go ahead.

Hi, good morning. So in terms of the Bass business, could you speak a little bit more to that; in particular maybe what progress has been made so far? What the early learnings are within that business and then also when you expect to begin to see sort of more meaningful productivity and profitability improvements in the business?

We are working aggressively in changing the product assortment that’s key. We identified that early on. We acquired this company knowing that there was a weakness in product. We acquired it for brand value, the real estate that it had, the amazing real estate that it had. The fact that we identified management that could support these issues that we had in mind and the fact that it integrated into Wilsons in Minneapolis very, very well. The changes that we’ve made as I said earlier are some of the top. The top management has been replaced and hopefully improved. We have a licensing agreement with PVH which now licenses the men’s wholesale component and their early reads are quite good, so we’ll start to generate some income derived out of licensing royalties. We had some very aggressive meetings with a vendor in Europe that we’re close to an understanding of a future license that would enable distribution in Europe. We’re looking at launching a women’s wholesale component. We were not quite ready with that. That will probably be the last piece that we add and improve. The early initiatives are the licensing piece, the footwear piece. We’re improving on the footwear assortment. We’re working closely with Harbor who is the current licensee in the United States on improving the product and the wholesale and retail men’s initiative, the men’s product most of it for our retail stores will be bought from PVH, simply because it looks amazing and we believe that the back end of the year will show a totally different picture. We’ve had lots of interest from retailers going forward for exclusivity, which we’ve denied. We like the brand for distribution throughout the country and pretty much throughout the world. So this will be a good asset for us.

Okay great. And then Morris, you also mentioned continuing to pursue more acquisitions. Now that you have a strong footwear business or resort wear business, are there any categories that you are more focused on going forward?

No, I don’t think. Well there’s been a focus on improving the scale of our team-licensed area. We are a company of scale today in that arena, but the scale is not enough in our view. We’re somewhere around $100 million in wholesale sales and there’s a big, big gap between what people like Nike and VF do and what we do in that segment and we would be that second tier of scale. So I think we have a good deal of room there, so we aggressively search for either acquisitions or additional assets to improve on that business. Beyond that, our pallet is quite broad. We’re able to integrate most companies. In our company we’re not focused on retail, we’re not focused on men’s, women’s. We’re focused on good companies that we could add value to; that we could either identify management to help us with or existing management. So we’ve succeeded in both cases. We’ve acquired companies where there was no management and we’ve got traction on it, that would be Vilebrequin and we acquired companies with great management that there was possible risk of that management leaving, while that management stayed when we acquired some of the Calvin assets and some of the Guess assets. So our culture is that of respect and understanding of the needs of management and we’re wide open into what we can integrate.

Okay, great. Thank you.

Thank you, Joan.

Thank you. And our next question comes from Rick Patel from Stephens. Please go ahead.

Good morning everyone and congrats on a strong year. Just a question on the Bass acquisition. You’ve owned it for a few months now and highlighted some key opportunities to improve the business. What do you consider to be the low hanging fruit for the improvements versus what the longer term challenges will be for improving that business. And as we think about accretion in the back half of the year, is it safe to assume that you’ll get there through a better expense structure or is a better top line also part of that assumption.

The low hanging fruit, I identified licensing as being virtually non-existent, so we believe that we can create a licensing revenue quickly. We won’t derive very much of that benefit this year, but there will be a strong business and if you value simply the cash flow that the licenses will generate compared to what we paid for the company, it would be an amazing acquisition. The other piece of low hanging fruit is improving on the product. The product is very, very poor. For many reasons we believe we can have an influence on that quickly. Our process right now is pretty much in liquidating the inventory that exists and that’s a little bit painful, but it’s the appropriate thing to do and then for the back half of the year to use superior product with good price points and we’re off to the races. We’re going to impact volume per square foot somewhat dramatically this year, the same as we did with Wilsons. When we acquired Wilsons the volume per square foot was approximately $250 a square foot and we’ve attained this year approximately $375 a square foot. At Bass we’re staring at a lower level with what we believe is even better real estate. We’re at $225 a foot and we believe that because of the footwear component, the locations of the stores and the structure that we’ve implemented, we believe we can beat the Wilson numbers and on top of it we add on as I said earlier, the licensing revenue and the global reach that this brand has.

Great, and then a question for Neal. Neal, can you give us a little bit more color on the Bass business just for modeling purposes. I’m curious, perhaps if you can talk about how we should be weighing sales by quarter and perhaps if there’s any quarters where the gross margin or SG&A is particularly skewed towards and also how the deal is going to have an impact on your longer-term corporate tax rate?

So in terms of the quarterly flow top line, the first quarter is the weakest quarter followed by the second and Q3 and Q4 are pretty comparable. As I mentioned in the earnings, before we expect to be slightly increased for the whole year and those earnings will be as Morris indicated, more back ended weighted, with Q2 being a quarter that’s impacted by how quickly we get out of our transition. In terms of tax rate, we don’t see any change in the tax rate as a result of the G.H. Bass.

Great. And then just a last question on Wilsons; can you just update us on your thinking for the full price store opportunity. Just curious how the stores you’ve rolled out so far are doing and I will point you to look to accelerate those efforts. Thank you.

We’ve opened about a dozen stores. They are doing fine. We’ve made some mistakes that we’re improving on. We believe store design needs to be modified and so does product. We’re on it and that we’re still very aggressive on the prospects of opening those stores. We’re opening several more this year and we’re on expansion mode. There’s no reason that this won’t work and as we gain proficiencies in other classifications, there’s nothing that says that we can’t integrate some of the footwear that we learn about into some of the Wilson stores. So the idea is to get better everyday. We’re still on the mode of improving who we are in the malls. As I said, we’re not very happy with the store design and we’re modifying it right now.

Thanks very much.

Thank you.

Thank you. And our next question comes from Eric Beder from Brean Capital. Please go ahead.

Good morning. Congratulations on a solid quarter.

Thank you Eric.

Okay, could you tell us a little bit about the Ivanka Trump rollout and how that is going to come out through the system here and also kind of the Calvin Klein performance. I know you’ve been opening stores with a license fee in China. How do you look at the Calvin Klein’s performance doing and where do you see that going in the years ahead?

Let me start with Ivanka. We’ve built an amazing showroom and again hired great talent to run that area of our business. The product is superior. It is one of the better launches that our company has had. We distributed dresses and suit and sportswear separates to our retailers. We believe that in our assortment we would classify Ivanka as a power brand. We have uniquely, we have pretty much all the apparel components to that brand. Our license is fairly comprehensive and as we launch areas of the business, our cooperation with Ivanka is great. She is a personality that does play an active role. We’re proud of that agreement and you’ll see some wonderful things in the near future as it relates to Ivanka. And as we were talking about CK’s performance, domestically we have two additional letter of intents for leases for one location in New Jersey and another one in Minneapolis. That would bring us to a total of five. We currently have three open; one in Scottsdale, one in San Francisco; the third one we recently opened in Las Vegas. We’re doing well. Its also been a learning experience. We’re improving on the product regularly. We’re understanding what the consumer wants and we’re seeing major improvements in our first store. Our Scottsdale store started off very, very well and then it slipped a little bit and today its improved dramatically. Its far better than its ever been. Comp sales are up significantly there. They are up in somewhere – I think its about 22% comp for last year. Its an exciting number for us and we’re continuing to open stores domestically. As it relates to our business in China, where we currently have approximately 25 stores, the stores are not profitable. We have a partner in China that owns 49% of the entity. He is the operating partner. We’re the provider of the product and China is not an easy market for us to conflict just yet. A lot of people have attempted China. We’re tempering our growth and we’re deciding about what our future strategy should be with China.

Okay, and just a quick update on the Calvin Klein handbags. I know you thought that you were going to see significant increases in the doors. How is the response into the Calvin Klein handbags and where do you see that going this year? Thank you.

Calvin Klein handbags is growing very nicely. Its one of our better growth areas. I said early on that this classification of business has a potential of growing to a $200 million business. I still stand by that. Wholesale sales are up approximately 40% against last year. Our store account is up 25% against last year. What we’ve done that’s made a difference is we’ve spent some money on building shops and hiring talent for managing those shops. Last year we had 18 shops and this year we’ve added 30 more and we’re continuing to evaluate where we should open additional shops. Its not only the shops. What we’ve done is we’ve hired people to manage those shops. They are on our payroll, not the department stores payroll. So what we have is a regional manager and we’re testing this concept first in Florida where we have an in-store employee and we have a regional manager that those employees report to and that’s made a huge difference in store performance and as we get more proficient in how to manage those people we’ll expand that concept hopefully nationally. So we’re excited about handbags. Its definitely a growth area for us and we’re likely to expand into other brands as we learn this business better.

Thank you. Our next question comes from John Kernan from Cowen. Please go ahead.

Hey, good morning guys.

Good morning John.

Just a little bit of a follow up to the prior question. How do you feel inventory is in the wholesale channel? Macy’s just came out with some comments that they are seeing a highly promotional environment that consumers haven’t really responded that well yet to spring offerings. So I’m just wondering, beyond just the inventory levels in outerwear, throughout the entire portfolio, how do you feel inventory levels are kind of in the wholesale channel, given where we are in the promotional cycle?

There are really two questions there. The first one, the coat inventory is relatively low. I addressed that a little bit earlier in saying that we believe we are okay on either mark down allowances and the return factor, simply because there is less inventory in the system. There is the question as it relates to spring inventory is a little bit different. There is inventory and there is likely the additional markdowns to move that inventory. There are a few, a solid few weeks missed at good retail and there is likely to be some additional markdowns taken to move the inventory and we’ve got that in our budget, we anticipated that. So we think we’ve planned it well, we are conscious of it and we move forward. This is just a moment in time. It’s a first quarter issue.

Okay, and then I guess shifting to Wilsons, the productivity recovery here has been pretty outstanding and dramatic. Where do you think we are? What inning are we in there? What’s been the biggest driver of the improvement; is it traffic, is it ticket? What is embedded in your outlook, in the top line outlook this year for Wilsons on a top line basis? Thanks.

We have, in our Wilsons plan we have double digit, low double-digit increased plan. We attribute it to solid management and an improvement of management. If you walk into Wilsons of today versus the Wilsons of three years ago, you would see a big percentage of our staff has been improved. We hired as I said earlier, some talent for the field from Abercrombie primarily. We were lucky enough to be able to retract them. As we are improving our business it became easier to garner top talent. So that talent now existed at the Wilsons and is motivating our people very, very well and we are seeing an improvement. We are building better product. As our wholesale grows and as designs improve through our wholesale offerings, Wilsons has the opportunity to walk through 17 floors of different brands and decide what’s appropriate for them and we modify it to be more Wilsons specific. We’ve expanded our handbag business at Wilsons and we are able to get now improved real estate. When a company is doing well, everybody wants to be a part of that company. So the developers are calling us for a better real estate. We are able to negotiate better deals, fixturing expenses that are coming down per store. So its costing us less to build a stores. We have lots of opportunities yet at Wilsons.

Thank you. And our next question comes from Jim Duffy from Stifel. Please go ahead.

Thanks. Good morning. A couple of questions. You’ve done very well to diversify. If you look out to the plan for the fiscal ‘15 where do coats stand as a percent of the business at this standpoint?

Coats continue to come down a little bit, Jim. Its probably going to go down to about 41% of our wholesale business, down just slightly probably from the current year which is low 40’s.

Thanks for that. And then Morris from a strategic standpoint, what do see as key whitespace opportunities to add to the portfolio, maybe its classifications or channels of distribution. Do you see more opportunity on the wholesale side or would you expect future acquisitions to be more focused on direct to consumer. Any perspective there would be helpful?

Our core business is wholesale. So if I lean towards anything, I would tell you that I would lean toward opportunities at wholesale. What’s happening in the department store sector is that there is a consolidation of brands; there is a consolidation of departments in many forms. So the strong seem to be surviving and flourishing. So fortunately for us as some of the brands evaporate, we get additional space in the department stores and as I said a little bit earlier, referencing people wanting to be part of success, I would tell you we have no problem negotiating space, opportunities and pretty much anything we need at the department store sector. We’ve become amazing partners and with the department store operators and its reciprocated. They are also amazing partners to us. So the growth in my mind would be the existing assets that we have, that we leverage in to greater space and broader product assortment that the department stores are likely to give us. So we are concentrating on our core distribution and expanding on it and adding talent to help us better understand the needs of the consumer in the department store sector. That would be the one area that you could look for major, major improvement without an acquisition.

Got you and then shifting gears to Vilebrequin, comps really saw a progress across the year. Clearly some of the new merchandising efforts are gaining traction. How accretive was Vilebrequin in the fiscal ’14 Neal?

It was an accretive event for us Jim.

Can you put some shape around that?

We haven’t been breaking it out separately. I can just tell you that we certainly saw good improvements. We had a loss last year. The business is still small relative to our total company, but it was a positive. I will tell you that in terms of operating margin the business is really now at a mid-single digit operating margin business. So that should give you some good color and we are looking for some improvement into the probably high single digit operating margin for the next year.

Good to hear and then last question, the gross margin really stand out in the fourth quarter, some of that presumably from reversal of markdown accruals. How should we think about that as a compare looking out to fourth quarter next year or I should say fiscal ’15?

You know gross margin in Q4 is not so much of a reversal situation for us. We did have a strong outwear season. We performed well across the retail businesses as well. So that’s really what drove it. I don’t think there was anything that unusual that we couldn’t be anniversarying again next year.

Good to hear. Thanks so much guys.

Thank you Jim.

Thank you (Operator Instructions) and our next question comes from David Glick of Buckingham. Please go ahead.

Good morning. Thank you. Neal I just wanted to dig in a little bit further on your comments on Bass for Q1. If I’m understating what you said correctly, it sounds like its at least a $0.20 loss for the quarter and I’m trying to understand how much of that is driven by the transition service agreement? How much of that is typically – obviously Q1 is probably the smallest volume quarter for Bass. I’m just trying to understand how much of that loss really goes away? How much sticks with you going forward and then I have a follow-up.

Yes, so you are right on your estimate. As far as the impact on the EPS, its around that $0.20 impact for the first quarter. It’s a little challenging to sort of split out the transition services cost, because some of those while they are direct from PVH, some of those are internally expenses that we are starting to absorb and build as we replace it. So that’s a little bit more challenging for us to come up with. And as I mentioned earlier, we do see that – in terms of the full year we see a slightly accretive event and therefore we see it coming out in terms of an EPS impact, more significantly in the Q3 and Q4 period.

Okay and then just a follow-up on your outlook. If you kind of segregate out your projections for Bass, which I presume are probably somewhere around $250 million in sales or in thereabouts, can you give us a sense for what the organic revenue growth is for your key businesses. You mentioned Wilsons up low doubles. I’m just truing to get a sense for, when you strip out the noise of the Bass acquisition and the transitory impact on your P&L, your guidance obviously was lower than expected. I was just trying to get a better sense. If you strip it out, what kind of top line growth and earnings growth you are really looking at here.

Right. So we indicated that our 19% total full year growth in top line at the high end of our range were about 10% top line growth in terms of EPS. The organic growth is about half of that and I mentioned that Bass will be just slightly accretive, so you can see that most of that earnings growth is from the organic, but almost entirely from the organic business.

Okay great. Thank you very much. Good luck.

Thank you David.

Thank you. And our next question comes from Michael Richardson from Sidoti. Please go ahead.

Yes, good morning and thank you for taking my question. I have actually two questions. One, I want to follow up on inventory issue, a question from earlier. It looks like inventory is up about 28%, 29%. Year-over-year, are you comfortable with inventory levels and I guess what amount is attributable to G.H. Bass and then I apologize if I missed this earlier, but Neal, did you give CapEx guidance for the coming year? Thank you.

So Michael, I did not give CapEx guidance. This year we spent about 29% and we expect the next year will be something comparable to that. Its primarily through the development, again of the retail at Wilsons, Vilebrequin and in fixturing within department stores. The first part of your question again?

I’ll be willing to do it. Inventory is up about 28%, 29% year-over-year. Are you comfortable with inventory levels and then what amount would be attributable to G.H. Bass?

Right. So very comfortable with inventory levels overall. The total increase is about 28%. Again the Q1 sales forecast is about 27%. Bass was about half of that increase. As we mentioned, the outwear inventories are probably in better shape than they’ve ever been at the company, especially in light of the size of the business and the non-outerwear pieces of our inventory are also in good shape.

Thank you very much.

Thank you Michael.

Thank you. We have no further questions at this time. I will now turn the call over to Mr. Morris Goldfarb for closing remarks.

Thank you for listening to our story and have a great day.

Thank you and thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.