Jonathan Ramsden - Chief Financial Officer Mike Jeffries – Chairman and Chief Executive Officer Brian Logan – Principal Accounting Officer

Jeff Klinefelter - Piper Jaffray Dana Telsey - Telsey Advisory Group Christine Chen - Needham & Company Janet Kloppenburg - JJK Research Paul Lejeuz - Credit Suisse Lorraine Maikis-Hutchison - Merrill Lynch Randy Konik – Jefferies Kimberly Greenberger – Citigroup Michele Tan – Goldman Sachs Jeff Black – Barclays Capital Brian Tunick – JP Morgan Liz Dunn - Thomas Weisel Adrienne Tennant - Friedman, Billings, Ramsey Jennifer Black - Jennifer Black & Associates Linda Tsai – MKM Partners Howard Tubin – RBC Robin Murchison – SunTrust

(Operator Instructions) Welcome to the Abercrombie & Fitch Fourth Quarter Earnings Results Conference Call. At this time I would like to turn the conference over to the Chief Financial Officer Mr. Jonathan Ramsden.

Welcome to our Fourth Quarter Earnings Call. Earlier this morning we released our fourth quarter sales and earnings, balance sheet, income statement and an updated financial history. Please feel free to reference these materials which are available on our website. This call is being recorded and the replay may be accessed through the internet at Abercrombie.com. Before we begin I remind you that any forward looking statements we may make today are subject to the safe harbor statement found in our SEC filings. Today’s earnings call will be limited to one hour. We will begin the call with a few brief remarks from Mike Jeffries, followed by a review of the financial performance for the quarter from Brian Logan and myself. After our prepared comments we will be available to take your questions for as long as time permits. Please limit yourself to one question so that we can speak with any many callers as possible. Now to Mike.

We believe the fourth quarter 2008 will go down in history as one of the biggest retail nightmares. It certainly will for me. We saw malls dominated by promotional activity, consumers who continued to show reluctance to spend, especially for premium brands and unprecedented volatility in the economy. In this context, particularly given our position as an aspirational brand we are satisfied with our results for the quarter. We reacted to the environment by cutting back on expenses. We used mark downs to clear through seasonal inventory. We reduced capital expenditures by scaling back on our domestic expansion and ended with a strong cash position. Most importantly, we executed our strategy in a way that enabled us to protect our brands. As a result of these actions, comparable store sales, ending inventory levels, and our earnings per share, excluding the effect of one time items, were favorable to the guidance we provided in November. Jonathan and Brian will provide more information on our financial results in a moment. As we look toward 2009 I want to make a number of points about how we are going to manage our business. 1) We’re going to protect the brands. 2) We’re going to preserve cash. 3) We’re going to push international growth. All of this in a seasoned disciplined and controlled way. First, we remain committed to protecting our brands, the cornerstone of a successful and profitable business model and therefore vital to long term shareholder value. Our commitment to providing trend right, high quality merchandise has never been stronger than it is today. We will continue to push forward on improved quality even as others remove quality from their product. We constantly obsess about discovering what is next and will continue to improve on our ability to offer a compelling product assortment. Second, we will preserve cash. We remain committed to managing our operating expenses. We have already undertaken a number of cost saving initiatives and will continue to look for additional opportunities. These efforts are directed toward insuring we are operating in the most efficient and effective manner. We will continue to be mindful of our capital expenditures and manage them for the seasoned and disciplined approach. Lastly, we continued to be encouraged with the results of our international expansion and are moving forward with our plans to bring our brands to the rest of the world. The Abercrombie & Fitch flagship performance continues to be phenomenal. We anxiously await the opening of additional flagships in the second half of 2009 and the Hollister SoHo flagship this summer. The Hollister UK mall based stores continue to outperform our expectations and we believe we have opportunity to grow that concept this year. We will continue to approach our international expansion with the discipline that the current environment requires and we’ll proceed at a pace with which we feel comfortable. Having said all of this, we will continue to focus on our long term objectives while seeking to maintain flexibility to respond to market conditions as we clearly demonstrated in the fourth quarter. I want to tell you that during this time of unprecedented turmoil I am completely confident in our approach and our ability to manage and control this business. Our brands are some of the most sought after in all of retail, we have one of the strongest balance sheets in the industry and the passion and energy of the ANF associates is unmatched. With these things in mind we will continue to strengthen our brands and be well positioned in more promising times. With that I will hand the call back to Jonathan but will be available to answer your questions later.

While the current environment is proving to be extremely volatile, as Mike said, we’re satisfied with our ability to manage the business through the past quarter and provide results slightly above estimates provided in November, excluding the effect of the impairment and tax charges. Net sales for the quarter decreased to $998 million, our total comparable stores decline of 25% was slightly better than we had anticipated driven by the combination of stronger post Christmas business, a trend that has increased in recent years and season ending clearance mark downs. Our gross profit rate in the fourth quarter was 64.4% down 280 basis points from last year as a result of higher mark down rate. We implemented cost reductions during the quarter which resulted in total operating expenses excluding the asset impairment charge in line with 2007. Excluding the asset impairment and tax charges net income per diluted share was $1.10 and somewhat above the high end of the range we provided in November. As we move forward into 2009 from a financial standpoint we will be focusing on the following; firstly, IMU and gross margin. Secondly, continuing with the rigorous review of all of our operating expenses both to achieve absolute expense reductions and to have a more flexible cost base. These efforts will be ongoing in 2009 and beyond. Thirdly, restoring our historical alignment of inventory with sales. Lastly, as we execute new deals in connection with our international expansion we want to ensure we are getting the best deals we possibly can taking advantage of the strength of our brands, very strong initial reaction to our openings in the UK and favorable conditions from a real estate perspective. In other words, our focus is going to be on getting the best possible deals done rather than on maximizing the number of deals. In all of the above we’re going to take a conservative view with market conditions and not rely on a strong economic recovery to restore our operating margin. Coming on to our specific plans for new store openings in 2009, our store growth for the year will be focused on international opportunities. Based on current firm lease commitments we expect total capital expenditures to be in the range of $165 to $175 million including $45 to $50 million for IT, distribution center and home office projects, and $120 to $125 million related to new stores, store refreshes and remodels. Domestically, in addition to the Hollister flagship in SoHo we have firm commitments to open nine stores in 2009. These commitments include two Abercrombie stores, four Hollister stores, two Gilly Hicks stores, one outlet store. Internationally we have existing firm commitments to open two mall based UK Hollister stores in addition to the three already opened and one Canadian Abercrombie store. Due to the success of introducing Hollister in the UK we are in active discussions with regard to additional store openings in Europe. Our current best estimate is that we will open approximately 10 additional stores by the end of 2009. We remain on track to open Abercrombie & Fitch and Abercrombie flagships in Milan in November and an Abercrombie & Fitch flagship in Tokyo in December. At this point we expect that the A&F flagship in Copenhagen and the Abercrombie flagship in New York will not open until 2010. With regard to operating expenses, as we have previously stated we have implemented a significant number of cost reduction initiatives in both stores and the home office. With regard to MG&A specifically we are confident that these initiatives will result in expenses below 2008 levels. These expense reduction efforts will be ongoing and will be responsive to the overall sales trend of the business. We expect that a difficult selling environment will persist throughout 2009 due to the current economic conditions and in particular their impact on sales trends we believe that providing specific EPS guidance at this point would be to borrow a phrase from a fellow retailer, “An exercise in false precision.” We will continue to provide monthly sales reports as in the past. Now to Brian who will provide the more detailed update on our fourth quarter financial performance.

Fiscal 2008 fourth quarter net sales for the 13 weeks ended January 31, 2009, decreased 19% to $998 million from $1.23 billion for the 13 weeks ended February 2, 2008. Fourth quarter direct to consumer net sales decreased 12% to $95.1 million. Total company comparable store sales decreased 25%, average transaction value per store decreased 25% and average transaction value decreased 1% compared to last year. One contributing factor in the decline in comparable store sales during the quarter was a lessening benefit from the Fifth Avenue flagship and US based tourist stores. From a merchandise classification standpoint for the total company the masculine categories continue to outpace the feminine categories as male comparable store sales decreased by a low teen while female comparable store sales decreased by a low 30. On the male side denim, knit tops and fragrance were strongest while graphic tees and fleece were weakest. On the female side knit tops, fleece and graphic tees were the primary drivers of the female comparable store sales result. For the fiscal year ended January 31, 2009, net sales decreased 6% to $3.54 billion from $3.75 billion for the fiscal year ended February 2, 2008. For the year, comparable store sales decreased 13%, transactions per stores decreased 15% and average transaction value increased 2%. Fiscal 2008 direct to consumer net sales increased 5% to $271 million. The fourth quarter gross profit rate was 64.4% down 280 basis points compared to last year. An increase in initial mark up rate was more than offset by an increased in the mark down rate versus last year. As noted during the third quarter call, the company anticipated a higher mark down rate would be required in order to clear through seasonal merchandise as a result of the declining sales trend and our limited ability to further reduce sportswear deliveries. For the year, the gross profit rate was 66.7% down 30 basis points compared to fiscal 2007. The decrease reflects the higher mark down rate in the fourth quarter. We ended the fourth quarter with inventory per gross square foot at cost up 2% as compared to the previous year which was slightly better than the guidance given during the third quarter call. As noted during the third quarter call, the increase in inventory at the end of the fourth quarter was the result of an increase in basic categories such as denim and polo’s, while seasonal fashion categories were down. A top priority in the first quarter of 2009 will be to reduce inventory levels to be in line with the sales declines. Stores and distribution expense for the quarter as a percentage of sales decreased 10.7 percentage points to 42.3% versus 31.6% last year. Although we introduced a number of initiatives to reduce store payroll hours in response to the declining sales the increase in rate versus last year is primarily attributed to the limitation on leverage and fixed expenses due to the comparable store sales decline. This year, stores and distribution expense also included a non-cash impairment charge of $30.6 million as it was determined that the carrying amount of assets related to 11 Abercrombie & Fitch, six Abercrombie, three Hollister, and nine RUEHL stores exceeded the fair value of those assets. The majority of the $30.6 million impairment charge is associated with the nine RUEHL stores. For the year, stores and distribution expense as a percentage of sales increased 5.7 percentage points to 42.7% versus 37% last year. The increase in rate primarily reflects this years -13% comparable stores sales result. For the fourth quarter, marketing, general and administrative expense was $101 million, down 2% versus last year’s expense of $103.1 million. The reduction in expense includes savings in incentive compensation and benefits, travel, and outside services. As a percentage of sales MG&A increased 1.7 percentage points to 10.1% from 8.4% last year. For the year, marketing, general and administrative expense was $419.7 million up 6% versus last year’s expense of $395.8 million. The increase in expense reflects investments in home office resources for flagship and international expansion, partially offset by fourth quarter savings. The effective tax rate for the fourth quarter was 45.7% compared to 36.9% for the fourth quarter of 2007. This year’s tax rate reflects $9.9 million in expense associated with the execution of the Chairman and Chief Executive Officer’s new employment agreement which pursuant to section 162M results in the exclusion of previously recognized tax benefits. Under the previous employment agreement, the company recorded deferred tax assets based on the anticipated delivery of benefits to the CEO in the calendar year following the year after his retirement. As a result of the new employment agreement, the CEO receives the benefits during his employment therefore the expected tax benefits will no longer be available. The effective tax rate for fiscal 2008 was 39.6% compared to 37.4% for fiscal 2007. Net income for the fourth quarter was $68.4 million versus $216.8 million last year. Fourth quarter net income per diluted share was $0.78 including charges of $0.32 versus net income per diluted share of $2.40 last year. Net income for fiscal 2008 was $272.3 million versus $475.7 million last year. Fiscal 2008 net income per diluted share was $3.05 versus $5.20 last year. For fiscal 2008 store square footage grew by approximately 9% due to the addition of 90 new domestic stores and seven new international stores, consisting of two Abercrombie & Fitch, 12 Abercrombie, 66 Hollister, six RUEHL and 11 Gilly Hicks stores including two Abercrombie and two Hollister stores in Canada and three Hollister stores in the United Kingdom. We ended fiscal 2008 with a total of 356 Abercrombie & Fitch, 212 Abercrombie, 515 Hollister, 28 RUEHL and 14 Gilly Hicks stores including three Abercrombie & Fitch, two Abercrombie, and five Hollister stores in Canada and one Abercrombie & Fitch and three Hollister stores in the United Kingdom. Fiscal 2008 capital expenditures were approximately $370 million which was lower than previously guided. The reduction is due to the delay in the opening of the Abercrombie & Fitch Copenhagen flagship and the Abercrombie Fifth Avenue flagship until 2010, and the scaling back of new US mall based stores. This now concludes our prepared comment section of the call. We are now available to take your questions. Please limit yourself to one question so that we may speak with as many callers as possible. After everyone has a change we will be happy to take follow up questions.

(Operator Instructions) Your first question comes from Jeff Klinefelter - Piper Jaffray Jeff Klinefelter - Piper Jaffray: I wanted to speak to you a little bit about ’09. I certainly can appreciate not providing guidance which it seems prudent at this point and thank you for your CapEx visibility. Can you help us a little bit with how to think about your line items on your income statement in particular the S&D in terms of the relationship between the top line? We can see what happened in 2008, since all of us do have to approach some sort of a modeling criteria for ’09 how should we think about the relationship of S&D and your ability to cut that back further or where you’re leverage points are. In other income, if you could help us understand what’s in that $5 million bucket in Q4?

With regard to MG&A expense as we said, we’re very confident that that is going to below 2008 levels because that is directly under our control and doesn’t necessarily vary dollar for dollar with sales. For stores and distribution expenses for any given level of sales we are implementing reductions in that category. It’s tough to give a specific commitment on that because that does in part vary somewhat with sales. What we can say is we’re very focused on that and for any given level of sales we believe that expense will be lower than it would have been previously.

In regard to the other income line, the amount that you’re seeing in the fourth quarter primarily relates to gift card. This is gift cards that have been deemed that redemption will be remote and its something that we do on a quarterly basis. The fourth quarter obviously tended to be a little bit bigger because historically that’s when a large percentage of gift cards are generally purchased.

Your next question comes from Dana Telsey - Telsey Advisory Group Dana Telsey - Telsey Advisory Group: As you think about each brand how are you thinking about positioning of the brand whether its with IMU in this environment and the potential mark down rate that could occur is there any different way you’re looking at it or thinking about it whether its pricing, whether its styling and also flow of product.

My first statement, protecting the brands is our priority in this environment as in any. We are working very hard for better quality and in fact better trend. We’re starting to see some better trend product in women’s tops which has been a real priority of ours. It doesn’t look as if we’re going to have a major trend to report in women’s tops but there are a number of different things happening. We hope to see more improvement in that assortment as the season proceeds. We continue to push for high IMU. We have looked at pricing particularly in the Hollister and the Kids brands and have reduced some of those retails. Those actions will produced some IMU pressure for the first half of the year. We think it is the right thing to do for those brands. However, we will continue to operate at good levels of gross margin. I think that’s the only guidance I can give you.

Your next question comes from Christine Chen - Needham & Company Christine Chen - Needham & Company: I’m wondering if you could talk a little bit about the learning’s that you’ve had from Gilly Hicks now that it’s been open for about a year, what’s working and what you would like to improve on.

We are very pleased with the performance of Gilly Hicks; it’s too early to report on any details there. As we have said in prior calls the at home portion of the business opened and is continually successful in the business. The areas that we have to build as a mature business are bras and underwear. We have made more progress in bras establishing the base of the business. We’re very, very pleased with where we are on the growth curve there. We’re starting to see improvement in underwear and we think we understand that business better than we have. Having said that, we’re very comfortable that both of those businesses are going to reach the levels that they need to on an average store basis in the time we’ve given them. The response to Gilly has been phenomenal it’s been absolutely phenomenal from a consumer point of view, from landlord point of view; landlords around the world are dying to have Gilly in their malls. From an industry point of view there is in fact a conversation in the intimate apparel industry about the Gilly effect on intimate apparel. We’re thrilled with this business and see it playing a major role in our business at some time in the future.

Your next question comes from Janet Kloppenburg - JJK Research Janet Kloppenburg - JJK Research: Congratulations on bringing the quarter in and getting the inventories in much better shape. Could you talk to us a little bit about the change in the expense structure given that the Abercrombie store and the Copenhagen store will not be opened this year what effect that would have? With respect to your cost savings implementations in the fourth quarter were you able to attack all you wanted to or should we look for a bigger emphasis on cost reductions as you go through ’09? I am seeing a lot of trends change in your product in the women’s area. I’m pretty encouraged and I wanted if you could highlight how some of the new women’s tops were performing.

Brian will give you in a second the numbers for pre-opening rent versus 2008 which bakes in the effect of Copenhagen and Kids. With regard to expenses overall I would say that what we did in the fourth quarter represented the savings that we could get to fairly immediately. I’m not going to say painlessly because when you let people go its never painless. They were savings, a lot of them were in MG&A they were things we were able to get to fairly quickly. Going forward, I think the exercise is going to be one of looking more structurally at how we’re set up and we’re going to be kicking off that second phase pretty much immediately. The effect of that is probably going to be harder to quantify and they’re going to come in over the timeframe. We’re looking at it from the perspective of saying what’s it going to take without counting on a strong economic recovery to get back to what we consider to be acceptable operating margins. That’s likely to require some fairly significant changes in our structural cost base. That’s the lens through which we’re going to be looking at it going forward.

From the pre-opening rent obviously with the number of flagships that we have in line to open up in 2009 which includes Milan and Tokyo in addition to that we have the Kids Fifth Avenue, Copenhagen which are now scheduled to open in 2010, then the Paris location. We will be incurring some incremental pre-opening rent charges this year. This would be incremental to what we incurred in 2008 of roughly about $20 million next year.

The answer to the tops question is that we are pushing newness as hard as we can. I think you’re seeing that in the assortments. The point is that you will see more and more newness as spring and summer proceeds. There are hits in the stock but it doesn’t look to us as if there’s going to be one major message that’s going to take us through the season, its going to be a series of smaller hits. That’s how our inventories are planned. We have a broader assortment in women’s tops then we’ve ever had and expect to see that through the year. We are operating on shorter lead times then we have. Running a very reactive and we think fashion right business.

Your next question comes from Paul Lejeuz - Credit Suisse Paul Lejeuz - Credit Suisse: Can you share with us what you think is the Hollister opportunity in the UK long term, maybe just touch on what you’re thinking in terms of that business extending to the rest of Europe at some point? Also wondering if you could share with us your latest thoughts on RUEHL and perhaps quantify how much it did drag you down in 2008.

The Hollister UK opportunity as we’re seeing it right now is 30 locations in the UK. We are proceeding with that kind of a plan. The interesting conversation is the opportunity in Europe. We are negotiating for European sights. We believe that the brand has to be tested in other countries, that’s what we’re going to do. However, we do believe that the exciting thing about the UK performance of Hollister, it was clearly terrific and you all know that, is that those stores look just like stores in Columbus, Ohio or Omaha. We sell the same experience, the same merchandise to customers that are virtually the same and we believe we’re going to be able to take that around the world. That’s a very, very satisfying thing and significant thing that has happened to this company in the last quarter. In terms of RUEHL we’ll give you the numbers.

Generally we think of our brands as one brand and it’s not a number we like to publish. All I can say is that from a store contribution perspective RUEHL drag in 2008 was slightly more than it was in 2007. We had benefits in our gross margin rate and some of our operating expenses which was then offset by the decline in the sales. That’s probably about as much as we can give you.

Let me talk about RUEHL, I have gone on record with you guys as being the villain in taking RUEHL to a place where it shouldn’t have been. About six months ago we put a new design team, new planning team, essentially a new team into the RUEHL business. I believe that we’re starting to see the result of that effort. We are pushing better fashion; better quality and those of you who have been in those stores have been commenting to me that you see the difference. We see the difference. We think that we will continue to see progress there. Having said that, we’re pragmatic people. If this exercise doesn’t work, however, I’m very comfortable that it will, over some period of time we’ll take a very realistic look at that business. Part of this relates to what the potential of our businesses by brand might be internationally. I think it’s very important to state that we’re not bullish on US malls at this point. We’re very bullish on our international potentials. We’re looking at each brand in terms of its potential internationally, that is the foreseeable growth vehicle for this company. We must look at each brand in regard to that potential. I believe RUEHL can play a role there. We’ll see how it plays out.

Your next question comes from Lorraine Maikis-Hutchison - Merrill Lynch Lorraine Maikis-Hutchison - Merrill Lynch: I wanted to get a little more clarity on how you’re planning inventory for ’09 or at least for the first half and when you expect to be able to get your orders back in line with sales trends?

Currently the ending inventory for beginning of February inventory was up 2% last year. That is broken down between basics and seasonal inventory. Our seasonal inventory as of February BOM was very close to being in line with sales trends, almost there. What was greater than sales trend was the basic component of the inventory. That includes as Brian said, polo’s, jeans, and non-risk items. We believe that we will have the basic inventory very much in line with sales trends sometime during the first half. Clearly our seasonal inventory levels are close to where they should be at this point and certainly would be in the first half.

Your next question comes from Randy Konik – Jefferies Randy Konik – Jefferies: Can we get the clarification on all the store openings globally for 2009? You used these very significant words in your press release, catastrophe, nightmare, unprecedented volatility to describe the holiday selling season. Can you give an update as we exited the quarter as we’re starting to go through spring are we still in a nightmare, are we still in a catastrophe from a volatility perspective, are you seeing as much volatility as you had seen during the holiday?

You must read my comment very carefully. I didn’t say it was a catastrophe for us. I said it was a catastrophe for the industry. There’s a very big difference there. This company guided itself in a remarkably disciplined season controlled way in an environment that was catastrophic for other retailers. We protected the brands during this environment. I don’t see the environment changing over the next year and we’re looking at the environment as if it is going to stay this way and managing the business with the priorities that we’ve established during this chaotic time. It’s very important to note that I’m not saying that we’re in any state of chaos. We are protecting the brands, we’re preserving cash and we’re pushing international growth in a seasoned, disciplined and controlled way. It’s very important that you understand the difference between the environment and how we’re operating.

Domestically we have 10 stores which we are committed to open in 2009. That’s the Hollister flagship in SoHo. We have two Abercrombie Kids stores, four Hollister stores, two Gilly Hicks stores and one outlet store. That’s everything we’re committed to currently domestically. Internationally we have firm commitments to open two additional Hollister’s in the UK in addition to the three that we’ve already opened in 2008 and one Canadian Abercrombie Kids store. What we’re saying is that there are potentially, our best guess at the moment is that an additional 10 Hollister stores in Europe that we think will likely to open in 2009. On top of that we have the Abercrombie and Kids flagships in Milan and Tokyo flagship which we expect to open in 2009.

Your next question comes from Kimberly Greenberger – Citigroup Kimberly Greenberger – Citigroup: I was wondering if you could clarify your comment on inventory either at the end of first quarter or through the first half. When you say you’re expecting inventory to be in line with sales decline are you talking total inventory, total sales or inventory per square foot to comp store sales. If you could help us understand that metric. Secondarily, what tax rate are you expecting in 2009?

With the inventory we’re referring to the inventory levels at cost at a gross square foot level. We’re comparing that to some comp sales metric. Obviously we have a plan in place to reduce our inventory levels; it’s a priority in the first quarter. The success that we’ll achieve in the first quarter will largely be dependent on the sales levels. It is something that is a priority as a company. As far as the tax rate, that’s going to be largely dependent as well on what our earnings end up being during the year because there are permanent and discrete items that affect the tax rate. As earnings move up or down those pieces have a bigger or smaller impact on the tax rate. Directionally we’re thinking that the rate will be higher than 2008 but we don’t have an exact rate at this time.

Excluding the one time item that significantly increased the rate this year.

Your next question comes from Michele Tan – Goldman Sachs Michele Tan – Goldman Sachs: On the basic inventory and getting that in line, is that more of a function of taking and substantially lower receipts on basics through the first half of the year or is it more aggressive in terms of efforts to clear some of those goods.

The answer is lower receipts. There is some mark down activity there but it’s related to colors and washes that are being discontinued. The answer is that it’s coming into line primarily through lower receipts.

Your next question comes from Jeff Black – Barclays Capital Jeff Black – Barclays Capital: On Europe can we get a performance update? How are sales looking year over year there or relative to the change if anything to give us an indication of how things are going numbers wise? I appreciate that you’re not going full board over there just yet but does the slowdown indicate that you have some reservations building about Europe in general or the strategy in general.

The comps in the UK are extremely strong. They’re stronger than the US and stronger than Fifth Avenue at this point. The three Hollister stores in the UK have opened extremely strong. There has been nothing that hasn’t given us every reason to believe that we’re going to have a very successful continued roll out in Europe. We feel extremely positive and confident about that. The question is more one of we want to make sure we do the right deals, we want to proceed at a pace that we’re comfortable with but there is nothing that has happened so far that has in any way led us question that. In fact, the opposite, it’s certainly reinforced our belief that there’s a huge opportunity. The contribution margins from those incremental stores are also very significant.

What has happened in the UK over the last quarter is very significant to this company. We’re cautious people; this brand is as a mall entry being proven in a huge way and totally opens the way for international expansion beyond the UK.

Your next question comes from Brian Tunick – JP Morgan Brian Tunick – JP Morgan: A little color on the pricing strategy, it sounds, at least in the stores, that AURs at least for the spring season are still going up at the adult Abercrombie business then you’re commenting that you expect them to be down or coming down at Hollister and Kids. Just curious if you’re trying to grow the pricing gap again like you did a couple years ago between Abercrombie and Hollister. I know a lot of the call has been focused on Europe or international, can you talk about the infrastructure that you guys have in place right now or systems or investments you might need to make to make Europe roll out smoothly.

The AURs for the adult brand is going to be pretty consistent with last year. AURs in Kids and Hollister down a bit and that’s more second quarter than first quarter. We’ve just seen that there are some categories in Kids and in Hollister that are price sensitive, some that are not. We’ve had this conversation. The increases that we’ve done in jeans and fragrance have resulted in more business. There are some categories, graphic tees, for instance that we abandon and opening price point in Kids and Hollister and we’ve gone back to that opening price point. These aren’t significant changes but we think they’re important for the positioning of the brands.

We have a Swiss headquarters office for Europe which has, at the moment not a huge number of people there. They work hand in hand with the home office here and since we’ve already launched several Hollister stores in the UK we anticipate that there will be some incremental investment needed going forward as we get into more countries. We’re not expecting that to be a significant drag as we go forward. The additional contribution from opening those stores would greatly outweigh any incremental investment we would need to make.

In answer to the question we had about where we are versus catastrophe you must go into the mall today and take a look at how we look, how we’re protecting our brands, in an environment that’s pretty catastrophic because very candidly most of the mall looks as if it’s in catastrophe mode. We do not and will not, that’s an important statement. Regardless of what we say here today, go into the stores, go into the malls, and see what’s going on. We are protecting the brands.

Your next question comes from Liz Dunn - Thomas Weisel Liz Dunn - Thomas Weisel: The first question relates to what your expectations are for the first half. I know you’re not providing any guidance but are you seeing anything that leads you to believe that there’s any type of improvement on the horizon and if we don’t see an improvement in comp trends should we see gross margin pressure similar to what we saw in the fourth quarter? You mentioned an incremental $20 million in pre-opening expense associated with international stores. Is there an offset associated with the domestic stores and are there any other big discrete items you can talk about that will lead to SG&A being down year over year?

We’re saying that we’re not comfortable at this point giving specific guidance. There are a range of potential outcomes. The point we’re making is that we’re intending to react in a very disciplined and controlled way to whatever confronts us. In terms of what the economy is going to do going forward and what that means in terms of our business we think there’s a range of potential outcomes which is really why we backed off giving the guidance. The important point is that we’re in control of the business and we’re ready to react to deal with whatever the situation is we’re facing.

As far as giving some more color on the pre-opening piece you’re absolutely right, there would be a benefit on the domestic side because there are significantly fewer numbers of domestic stores that we’re opening. Unfortunately I don’t have a number that I can give you at this time. I will say that I wouldn’t expect the number to be extremely large because the lead times for opening a US mall are much shorter than a flagship. The rents obviously are much less than what you would see in a flagship. There would be an impact but I don’t expect that number to be of any significance.

Your next question comes from Adrienne Tennant - Friedman, Billings, Ramsey Adrienne Tennant - Friedman, Billings, Ramsey: My question is also on stores and distribution. On the minimum wage, back in November you had thought maybe there would be an additional incremental $2.5 million per quarter into ’09. Is that still the case?

There was, if you recall, there was a couple things that happened in 2008. One, there were some manager salary increases that occurred toward the end of the second quarter. That obviously won’t anniversary until the end of the second quarter 2009. In addition, the way many of the states minimum wage increases worked it was a phase in approach over multiple years. Most of the states, the phase in happens in the July month. We would expect an additional increase in July of this year so we’ll be anniversarying in the first half of this year, last year’s increase plus there will be an additional one that will be coming in this year. As far as the impact on what these will be in 2009, I don’t have an exact number for you because it’s going to largely be dependent on how our business is performing and our expense structure that we’re going to have in the stores. I can tell you that there will be some pressure still related to the manager’s salary increase at least for the first half of the year and minimum wage for the full year but probably not quite to the extent that we saw in 2008.

Your next question comes from Jennifer Black - Jennifer Black & Associates Jennifer Black - Jennifer Black & Associates: I wanted to know how many leases you have coming up for renewal over the next year and I’m talking obviously domestically. With a further deterioration in the environment are your negotiations getting even better, I know we talked about this on the last call. How does it compare to the leases that you’re getting in Europe because it seems like right now would be the perfect time and that’s what you’re doing in Europe. If you could elaborate on that, that would be great.

We have about 50 domestic leases coming up for renewal this year. We’re going to take a very hard look at each of those and make a decision case by case as they come up, based on the history of the store and the full set of circumstances. The second part of your question is how does it compare to the lease terms that we’re getting in Europe? I don’t know if we necessarily look at it that way. We look at it from the standpoint of for any given store are the lease terms we get going to give us an appropriate contribution level. I don’t know if we necessarily look at it from the standpoint of the lease terms vis-à-vis the UK, vis-à-vis domestic. We are finding at the moment that we’re able to get the deals in the UK which we think are going to be very accretive.

You put your finger on the point of where we are. We have international opportunities that are really being proven, Hollister chain, A&F flagship and the opportunities there are huge. We can be very, very tough about these locations particularly the US locations. We have options. Most other people don’t have the options for growth that we have today. Very exciting time for us.

Your next question comes from Linda Tsai – MKM Partners Linda Tsai – MKM Partners: With regards to the comment on expected IMU pressure in the first half of 2009 it seems to imply less pressure in the second half. What would you primarily attribute that to?

I’m going to respond to that to realistic look at where our pricing should be by brand and a focus on that, that we’re able to really start seeing results beginning with the back to school product.

Your next question comes from Howard Tubin – RBC Howard Tubin – RBC: Recognizing that using price as a traffic driver of promotions isn’t a direction you want to take the brands. Have you considered or would you consider anything else, any type of in store event or anything to help drive more traffic into the stores?

No, but let me be clear about this. We believe what drives in store traffic is a fascination with what we do in store and that is made up of an in store experience that is second to none and compelling fashion. That’s how we drive volume in the stores. We are not promotional and will not be promotional. By promotional I mean 50% off a category, buy one get 17 free or somebody whispering to you about a secret sale. We don’t do stuff like that. We drive our business with fashion and in store experience. Having said that, we do take clearance mark downs as a natural rhythm of the business and we’re strategic about how we take mark downs. We’re pragmatic people. That’s how we look at the business; we are not and will not be promotional in the ways that I’ve described.

Your last question comes from Robin Murchison – SunTrust Robin Murchison – SunTrust: If I could go back to the product cost question, I see what you’re saying on the first half but with regard to the second half and in light of some of the things we’re hearing out of Asia pricing, can you comment on what you’re seeing in terms of perhaps second half pricing out of Asia. Also related to that any change in shipping methods with energy and oil specifically down is there any reconsideration or if you would remind us of where you on ocean versus air freight and if there’s an opportunity to switch more to air freight to take down the lead times?

Factories want business and prices are becoming more and more competitive. Having said that, the way Diane Chang operates and believe me she is the most confident person in this business today, has been to establish key factory relationships. We’ve never gone to looking at a price for any factory. This ensures us, which is another important part of this conversation, continued quality deliveries. Having said that, clearly people need more business than is currently being thrown their way in the factories. We see the advantage coming to us. In terms of air versus boat, as a matter of fact, we’re at a point that we’re doing a little more boat then we have in the past but we have worked schedules that were more efficient with boat then we have been in the past. Our balance is going to be a little more boat than air which will result in better IMU for us without sacrificing the lead time. We’re operating with very short lead times and we’ll continue to do so.

I’ll turn the conference over to you for any closing remarks.

Thank you for joining us today on our Q4 call.

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