Michael Smith - Vice President, Investor Relations Scott Edmonds - Chairman and CEO Kent Kleeberger - CFO Michele Cloutier - Chico’s Brand President

Lauren Levitan – Cowan & Company Kimberly Greenberger – Citigroup Tracy Kogan – Credit Suisse Liz Dunn – Thomas Weisel Jeff Black – Lehman Brothers Adrienne Tennant – Friedman Billings Ramsey Michelle Tan – Goldman Sachs Barbara Wyckoff – Buckingham Research Group Lorraine Maikis – Merrill Lynch Margaret Whitfield – Sterne Agee Marni Shapiro – The Retail Tracker

(Operator Instructions) At this time I would like to welcome everyone to Chico’s First Quarter 2008 Earnings Results Conference Call. I will now turn the call over to Mr. Michael Smith, Vice President of Investor Relations.

Welcome to Chico’s FAS, Inc. First Quarter Earnings Call. Today we will have our Chairman and CEO Scott Edmonds and our CFO Kent Kleeberger giving prepared statements on the business. This will be followed by a question and answer session. Before we start I would like to read our Safe Harbor Statement. Certain statements contained herein including without limitation statements addressing the beliefs, plans, objectives, estimates or expectations of the company or future results or events constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. Such forward looking statements involve known or unknown risks including, but not limited to, general economic and business conditions and conditions in the specialty retail industry. There can be no assurance that actual future results, performance or achievements expressed or implied from such forward looking statements will occur. Users of forward looking statements are encouraged to review the company’s latest annual report on Form 10-K, its filings on Form 10-Q, management’s discussion and analysis in the company’s latest annual report to stockholders, the company’s filing on Form 8-K and other federal securities law filings for a description of other important factors that may affect the company’s business, results of operations and financial condition. The company does not undertake to publicly update or revise its forward looking statements even if experience or future changes make it clear that projected results expressed or implied by such statements will not be realized. I will now turn the call over to Scott Edmonds.

With me on the call today is Kent Kleeberger our CFO, Michele Cloutier, Chico’s Brand President will join us during the Q&A portion of today’s call. Net sales for the 13 week period ended May 3, 2008, decreased 9.6% to $409.6 million from $453.1 million reported for the 13 week period ended May 5, 2007. Net income for the fiscal 2008 first quarter was $12.7 million or $0.07 a diluted share compared to net income of $47.2 million or $0.27 a diluted share in the prior year’s first quarter. As previously reported comparable store sales decreased 17.5% for the 13 week period ended May 3, 2008, compared to the 13 week period last year ending May 5, 2007. The Chico’s brand same store sales decreased by approximately 22% in the White House, Black Market brand same store sales decreased by approximately 10%. The challenging sales environment experienced in fall 2007 has continued into the first quarter 2008. The generally suppressed economic outlook including housing pressures, rising food and fuel prices and the more negative employment picture has eroded consumer confidence and impacted discretionary spending on apparel especially in the missy sector. As we stated during our earnings call in March we are focused on inventory management and expense control. This focus resulted in a year over year decline in inventory per square foot of approximately 4%. We are pleased with the progress so far and are continuing our efforts to bring down inventories further for the balance of the year. While our overall year over year operating performance has declined we did see an improvement in the trend of same store sales performance for the White House, Black Market brand in the first quarter 2008 over the fourth quarter 2007. The Soma Intimates brand continues to experience significant top line sales growth during the quarter. However, our core brand Chico’s saw continuing deceleration in same store sales during the quarter and we continue to experience significant year over year declines in our Travelers collection. We recently conducted customer focus groups to confirm that the corrective measures we have in place for the fall season should improve the performance of this very important product category. In addition, we gained further insight in our customer’s apparel purchase behavior. We continue to expect negative comparable store sales for the first half of 2008 and expect to have lower earnings than the first half of 2007. Our current expectations ought to gradually improve and return to positive comparable store sales increases sometime in the second half of 2008 if we can expect some level of improvement in the economic environment resulting in overall earnings growth during this timeframe. We are steadfastly committed to protecting our free cash flow and our strong balance sheet that includes approximately $271 million in cash and marketable securities and zero debt. This, along with our extremely loyal customer base should position us to take advantage of any market opportunities with overall economic conditions improving. Chico’s first quarter overall performance for our core brand Chico’s was extremely disappointing. Our transactions were down 13% versus 7% in Q4 and average dollar sale was down 9% versus 10% in Q4. A record early Easter and unseasonably cool temperatures further compounded a difficult business environment. Despite opening the quarter with more forward positioned inventory we were unable to post stronger sales due to assortment challenges and sluggish demand. From a product perspective we continue to see deteriorating results in our Travelers collection. However, as previously mentioned the corrective measures we have in place for the fall season should improve this categories performance. Accessories were also down continuing the same comp trend we saw in the fourth quarter again being driven by jewelry and belts. The bottoms business is also challenging in the first quarter. Although pants, denim and shorts have been posting very strong results for the past 12 months these categories took a hit as we saw the customer pull back on her spend on full price commodity businesses. The most significant challenge in the bottoms business was in seasonal businesses like crops, shorts, white bottoms and linen. These categories at full price have been down significantly year over year. Although our results would indicate that our customer was disappointed in our product mix we did see her respond favorably on a couple of key categories. Jackets had a significant improvement over Q4 posted a positive comp including the novelty portion of this category. Outerwear, novelty sweaters and active ware all had solid performances. Our basic t-shirt business also posted a strong comp in the quarter. Much of what we saw occur in the first quarter has continued into the early part of Q2. We continue to be focused on moving through our inventory and managing to an August BOM that should be down year over year. These results have required that we aggressively increase our consumer insight. Our extensive focus group research has validated our concerns in both the Travelers category and the overall business and we are positioning the back half to deliver what we believe will have our customer reconnect with us again. We will increase our novelty investment, continue to provide products that are unique, watch our investment on commodity categories and celebrate our 25th anniversary with limited edition products. Again, we are certainly not underestimating that this will be a challenging year and we’ll watch our inventory investments very cautiously. Turing to the White House, Black Market brand the first quarter performance at White House, Black Market showed improvement over the previous fourth quarter trend and steady progress improving quality, fit and brand marketing initiatives mentioned on previous calls. Although we have not turned the corner to positive comps we are tightly managing inventory while we continue to improve the product, the infrastructure and processes in the White House business. With consistent improvement in the product we are experiencing positive traction in some of our key metrics to last year. Average dollar sale increased 2% and average unit retail increased 4% over last year. Transactions in comp stores were down approximately 9% however the quality of these transactions continued to improve. We’re seeing the positive response to our new full price collection and in particular a strong turn around in our bottoms business. The end of Q1 we were able to significantly improve the pants fit and quarter over quarter impacted the bottoms business with a strong comp improvement. You should see continued improvement in growth in this category throughout the second quarter and a complete re-launch in fall 2008. Outerwear which is a new business for us was extremely successful throughout the quarter as was the casual and denim business. Our dress business, which is a core of the White House, Black Market brand was challenged in the first quarter and continues to be difficult in the month of May. Fallout from quality issues severely impacted inventory levels and subsequently comp sales. We have repositioned the product and reorganized the business under new leadership expecting to be in a stronger position by mid June. The direct mail cadence was in line to last year and we experienced a strong response to our first quarter mailers. Fashion continues to drive our full price business and we are seeing higher than historic selling on items featured in our direct mail campaign. We have not been in a strong enough inventory position to meet the positive customer response and should be better aligned to meet the demand by fall. We remain confident in the repositioning of the White House, Black Market brand to a more upscale and sophisticated fashion brand. Turning to Soma, we are pleased to report the positive momentum on the Soma brand continued to accelerate in Q1 2008. Both front line and direct consumer channels experienced strong growth propelled by new product introductions and compelling promotional programs around the Valentine, Easter and Mother’s Day holiday periods. The five styles Soma solutions bra launches in February and March filled major voids in the bra product assortment. Supported by a strong problem solution launch marketing platform Soma solutions was almost entirely incremental to bra sales for the quarter. In addition, momentum behind the successful fall 2007 vanishing edge panty launch was sustained through new style introductions as well as expanded fashion color choices. Within the apparel category active wear continued its strong performance while the sleepwear business defied a negative overall market trend with a flat performance. Television advertising behind vanishing edge panties supported the brand in selected markets during the pre-Easter and pre-Mother’s Day period driving significant increases in comp store and VPC sales in the television markets. We were very pleased to see comp store sales lift sustained in the period after the television flights. A new TV market, Chicago, was added in the pre-Mother’s Day period with growth results consistent with the experience in other markets. Additional television support for this brand is planned for the fall in key markets. Since the Soma brand inception ecommerce has been viewed as critical to building brand awareness and trial ahead of store expansion. During Q1 the Soma direct to consumer business grew 17% of total brand sales up from 13% in Q1 of ’07 exceeding prior year sales by two times. Ecommerce conversion rates for Soma are very high and are running double last year’s rate. Our highly integrated front line DTC product and marketing strategy for Soma is proving extremely successful in driving new customer acquisition and sales. We continue to be encouraged by the substantial progress the Soma team is making towards perfecting the economic model of the brand with respect to both sales growth and operating margin improvement. In closing, 2008 continues to be an extremely challenging year and we’re planning our business accordingly. We remain focused on inventory management expense control and proving our product offerings across all three brands continuing to evolve our marketing and customer loyalty programs, continuing to provide our customers with our most amazing personal service across all three channels of distribution; stores, internet and catalog. Protecting our free cash flow and our extremely strong balance sheet. I continue to believe that when the economy begins to improve Chico’s FAS, Inc. will emerge once again as a leader in the Missy specialty store sector. Now over to Kent for his comments.

I would like to believe that the first quarter of 2008 will prove to be our most challenging quarter for fiscal 2008. We continue to face a tough economic environment as tighter wallets result in less traffic on top of other issues such as an early Easter that was felt by the lion’s share of apparel retailers. Added to that were some of our own fashion missteps with product along with the major challenge of trimming inventory levels particularly in Chico’s. However, all is not gloom and doom as we have had small victories and pockets of improvement but there is still a lot to do. First let’s look at the key financial results. As you can see from our press release we experienced a negative 17.5% comp for the quarter but we were still able to deliver net income of $12.7 million or $0.07 per diluted share. Additionally we recognized charges of $6.8 million which represents a combination of efforts to clean up aged and overstock inventory in Chico’s and estimated costs to close seven Soma stores that were oversized and not part of our long range plan for this brand. Consolidated net sales for the first quarter were $409.6 million down 9.6% versus last year. The Chico’s and White House, Black Market brands continue to face challenge in certain merchandise categories but more so in Chico’s. It should go without saying that each brand in standing up to these challenges virtually every day they show up for work in an effort to course correct. We believe the White House, Black Market brand could turn the corner a little quicker than the Chico’s brand which is not totally unexpected based on a narrower assortment for White House, Black Market. That being said, Chico’s is a much larger and more complex business and has been and will be slower to turn around. During the quarter we became more aggressive on managing our inventory facilitated by higher mark downs and cancellation charges. Our gross profit came in at 55.9% down 580 basis points over last year. The biggest drop came in the Chico’s front line margin; it was down 290 basis points versus last year. You may remember that Chico’s experienced record margins in first quarter 2007. The decrease in the gross margin rate experienced added pressure as we continue to fund investment in product development and merchandising functions. Although first quarter and overall inventory was up approximately 12% since the end of the fourth quarter and up 14% versus the end of Q1 last year inventory on a per square foot basis was down 4.2% versus the end of Q1 last year or about $65 per square foot compared to $68 last year. We will continue to focus on managing our inventories at a more conservative level as we go through the remainder of the year. Our ongoing challenge is to bring overall inventories down to about starting category that display an improved trend. Moving to SG&A total expense for the quarter approximated $212.1 million or 51.8% expressed as a percentage of sales and reflects and increase of 660 basis points versus last year. The increase was primarily driven by store operating expenses which reflected a 520 basis point increase as occupancy costs increase by $10.2 million which also means we had a savings in other areas such as labor and store supplies. Marketing also came in a little higher at $22.8 million displaying nearly 100 basis point increase in rate. While we had previously stated that we will be spending less marketing dollars in 2008 versus 2007 most of the savings will be in the second half. In addition, we planned incremental marketing dollars in Q1 this year versus last year to fund TV for Soma which has been working with much success. We also invested in customer research for Chico’s which includes a number of focus groups conducted throughout the country. Another piece of good news is that shared services expenses for the first quarter came in lower at $28.3 million versus $29.5 million for first quarter last year. Unfortunately the level of comparable store sales declined masked much of the progress we are making on our expense structure as de-leveraging caused by lower sales was the primary culprit for the increase in our SG&A rate versus last year. As we look at store operations we do have some measured successes. We have eliminated bonus guarantees and are planning and testing new approaches to the store bonus plans. We’ve also begun work on a more efficient payroll management structure through improved sales planning and rate management. We have also started a number of cost savings initiatives including those involving utilities, store maintenance and store supplies. Although not a component of SG&A but worthy of mention is that we have virtually eliminated air freight delivery from DC to stores with few exceptions saving the business about $5 million versus last year. These items represent just the beginning of actions that will add up to significant savings and more efficient operations. While our direct to consumer business saw slight decrease in the first quarter to $16 net sales are down 3% from the previous year. We continue to see the direct to consumer business as an overall growth vehicle as it only represents 3.9% of our overall sales. You should know that while the Chico’s brand DTC business was down in line with front line stores the White House, Black Market and Soma businesses nearly offset the Chico’s shortfall. We’re also pleased to report that during the quarter our Soma brand continued to show significant top line improvement. We feel confident that the customer is responding to product selection including new product introduction and the overall shopping experience. Further, we are making significant inroads in fine tuning the go forward store model. We are committed to the long term growth of this brand and significant potential value to our shareholders so stay tuned. Regarding store openings, we opened 23 new stores, closed five and expanded or relocated 17 during the first quarter. We expect to open between 17 to 19 stores and expand or relocate 9 or 11 stores during the second quarter and maybe we’ll close one or two more stores. In summary, the Chico’s FAS brands have a strong history and we have set very high standards for ourselves and our businesses based on cash performance. None the less we have not met our sales and profit goals for the past quarter and we are disappointed in numbers that we are reporting today. It is important to remember that we are very productive business that ended last year doing about $800 per square foot and generated positive earnings and cash flow despite generating negative comparable store sales. Additionally we have a very loyal customer, a strong balance sheet with plenty of cash and no debt. As we progress through this year we are focused on cash management which encompasses preserving and maintaining cash while the business stays challenging, better management of our inventory levels is front of mind and we are working with each of the brands to bring them more in line. Further, the CapEx purse strings are tight for the time being and we spend only what is critical for the near term execution and necessary for the long term health of our business. We are very much aware of the current challenges facing the retail sector as it relates to consumer spending. We see very little in the economic tea leaves to get excited about for second quarter which is why we’re still planning negative comps and lower earnings from last year. Our focus continues to be improving and in strengthening our brands as we traverse through this tough economic cycle facilitated by the continued hard work of all of our associates. I firmly believe we have the potential to turn this business back in to a hugely cash driven franchise that will reward our long term shareholders. With that said we’d like to turn the call over to Q&A at this point.

(Operator Instructions) Your first question comes from Lauren Levitan – Cowan & Company. Lauren Levitan – Cowan & Company: I’m wondering if you could give us any more clarity on your comments around Travelers and your view that things will be working by fall. Related to that if you could give us any sense from these focus groups that you conducted are there certain types of customers that are falling off, is it related to age or size or lifestyle or region, any insights there would be helpful. I had a clarifying question for Kent, could you give us a little bit more color on the inventory breakdown, some more granularity related to the levels Q1 and across different brands and regular price versus markdown that would be very helpful to have a better understanding of where the inventory declines are coming from.

On the customer focus groups relevant to are we seeing any specific type of customer fall off, that answer is really no, there’s no one age or one region of the country that we’re seeing customers fall off. There spend is down across the entire group. Regarding the Travelers the comment about fall, we thought that we were on to what we needed to do for that category before we put the focus groups together and that’s really confirmed we’re tracking in the right direction. Some of that is relevant to the mix between novelty and basics, the mix between additional colors. I don’t want to give too many specifics on that as I do believe our competition could react to anything that we said for the fall period.

We have so many statistics and metrics that we’re measured by. I’m reluctant to give anything else that’s out there in the public domain. I will tell you that inventory was down in both Chico’s and White House, Black Market actually more so in White House, Black Market than Chico’s. I will tell you in particular with White House, Black Market we have had significantly less markdown inventory as well as full price.

Your next question comes from Kimberly Greenberger – Citigroup. Kimberly Greenberger – Citigroup: I was hoping you could talk about the expectation for positive comps in the second half of the year is that based on category performance that you’re expecting to get better, is it based entirely on an improving economic picture or is there something else that you’re looking at in your business that’s giving you a reason for that optimism.

In terms of the positive comp outlook we said sometime in second half I think realistically we’re looking for gradual improvement as we approach going into fourth quarter. Certainly there are a number of issues that are being addressed in each of the businesses from a merchandising perspective. If I were to go through each of the ones I look at Travelers first then I take a look at some of the deliveries we see in the August and September timeframe I think it looks fresher, there’s much more novelty. We’re trying to make positive change. It sounds like we’ve got the jacket fit worked out well in Chico’s business, that’s helping. The accessories business we’re trying new things every day its just that’s been a little bit challenging from an overall market perspective but we constantly introduce new products. In the White House, Black Market business I know that we’re still trying to look at the collections part of the business as well. It looks like we’ve done a decent job in terms of addressing the fit issues in the bottoms; time will tell how the customer receives that in the second and third quarter. I think all of these individually are small changes represent incremental change and stronger momentum and admittedly while we’re doing everything we think we can do to fix merchandising issues we could use some help from the economic conditions as well.

When you just look at the historical builds on fall versus spring and you compare the volume of by week, by brand we’re a bit more optimistic coming against the dismal numbers that we posted last year. We absolutely should see a turn. Kimberly Greenberger – Citigroup: Are you buying inventory with the expectation that comps will be positive?

We’re still working out our fall plans but we’re going to manage it much closer to the vest. My perspective is that I think we can still do positive comps on lower inventory levels.

As I said, we are trying to make sure we are down year over year August DLM.

Your next question comes from Tracy Kogan – Credit Suisse. Tracy Kogan – Credit Suisse: Can you help us, how should we think about SG&A dollar increases for the remainder of the year and then secondly I was wondering if you could just refresh us on your store openings planned for ’09 and whether those plans have changed given the continuation of weak trends?

The store opening cadence is going to slow down as we go through the balance of this year and if you recall the comments about the SG&A expense line the biggest component for the increase was occupancy expense. We’re one of a few retailers that include occupancy as part of our SG&A costs so as we slow down the store growth we’ll probably get some relief in the occupancy line and therefore the SG&A rate. As it relates I think you also had a question relative to ’09 and we really haven’t moved from where we were before at the end of fourth quarter. Right now I think we’re committed to about nine or 10 new stores and that’s it. Maybe there are some additional relocations, remodels but we’re just holding close to our vest until we see significant improvement in trend.

Your next question comes from Liz Dunn – Thomas Weisel. Liz Dunn – Thomas Weisel: My question relates to your advertising plans it seems as though you’re expecting some improvement in growing merchandise in the back half yet you’re pulling back on advertising in the back half and you’re expecting positive comps in the back half. I’m confused by all of that if you could help us get a little bit more comfortable with your advertising plans relative to your comp expectation and your merchandising.

I don’t think it’s necessarily a pull back as much as it is spending our dollars a little bit more efficiently. We’ve taken a hard look at page counts for all of the brands in addition to that we’ve taken a look at the way that we mail to prospects and part of the reactivation. It’s really a function of just investing our dollars a little more wisely. Liz Dunn – Thomas Weisel: On inventory, could you talk about the inventory, the unit positioning versus the total number you reported because I know took some write downs so does that suggest that on a unit basis you’re actually a little bit higher?

Not really because if I take a look at Chico’s business our average unit retail is actually down and while White House, Black Market is up slightly they’re down in units as well. It’s really not a unit question. I know that you were inferring relative to the charge that we took and maybe I’ll just take this as an opportunity to explain what was entailed in that. The first thing is that we weren’t that efficient in recognizing our marked out of stock. Typically most apparel retailers will clear their selling floor for the previous season’s goods about 45 days or so after the end of the previous season and our execution on that has been somewhat inconsistent. In addition to having some aged inventory in the Chico’s brand and everybody infers that once the goods are transferred from the front line stores they go to the outlets. We have a similar situation in outlets in that we have a significant number of units that are aged in the outlet stores. We’ve taken an opportunity to take the charge to clean up inventories. We’re also looking at doing some liquidations with jobbers which previously this business has not done for quite some time but the fact that we’re adamant about trimming our inventory levels we’re looking at any reasonable approach to get rid of some of the excess units. Liz Dunn – Thomas Weisel: Where would those goods be routed to like a Marmax?

To be determined. We’re having conversations with various outside third parties.

Your next question comes from Jeff Black – Lehman Brothers. Jeff Black – Lehman Brothers: I was wondering if you could just frame up the expense opportunities you see over the next couple of years. If you could just put it in terms of the kind of operating margin benefit you ultimately see or in terms of a lower hurdle rate that you ultimately see for the company. Second, on inventory if you look on a per square foot basis what kind of levels should you be running at. We’ve been running at lower levels for a while but with Soma direct etc. I’m wondering if those mid 50 targets are unrealistic at this point.

When I take a look over the longer term two to three years I think the biggest opportunity we have is in the margin category. We can cut expenses and we can set goals to trim SG&A 10 or 20 basis points a year but in my estimation the real opportunity is margin. It really goes into various buckets. The first bucket that comes to mind is the ability to do direct imports. The direct import portion of our business is under penetrated. Secondly I think we have an inordinate amount of our deliveries to the distribution center facilitated via air versus ocean and that’s really more complicated because it involves the product calendar and being disciplined holding to go, no go dates in terms of when we cut goods. I think there’s a huge opportunity to shift from air to ocean rather. The last piece in addition to doing direct importing there’s also an opportunity to do direct sourcing but that also requires some investment in terms of opening up a footprint if you will overseas in order to potentially go to direct to factories an bypass some of the middle men, not eliminate them but to bypass some of that business as well as doing a better job in terms of managing our piece goods and as the quality opportunities to address issues over there as opposed to when they hit our DC over here. I think that everybody’s been asking about what we think the opportunity is for operating margins on the longer term. I think realistically given what we believe the opportunity and the gross margin as well as some expense savings I’d like to see us get back in the 15% above category over the longer term. I’m not going to expect that is going to happen in ’09 but I expect to get there perhaps in three to four years. The other question you had is what do I see is a reasonable level of inventory per square foot over long term and I just answered that, less than what we have now.

Your next question comes from Adrienne Tennant – Friedman Billings Ramsey. Adrienne Tennant – Friedman Billings Ramsey: My first question is can you comment on May month to day with four days left in the month if there are any trends, are they continuing from the April trend?

I’m really reluctant to comment on May month to date. I think suffice to say if we thought that there was a material change from the first quarter trends we would have said something by now. Adrienne Tennant – Friedman Billings Ramsey: Getting back to the inventory, my question here is the sales productivity in the first quarter was down 25%. The inventory while it was down wasn’t down as much as it seems it should have been and I know that you are committed to controlling the inventory but it just seems as though the way that you are talking about it, it may not be as aggressive as it should be. Can you help me understand why I shouldn’t be thinking that inventory maybe should be down 15% to 20% rather than the kind of mid to high single digit range that seems like you’re talking about.

You may recall from the fourth quarter call that when we decided to start trimming inventories was probably in the December timeframe. That was very hard to impact first quarter delivers so we made no bones about the fact that we were going to enter first quarter with higher inventories that we would like. I think what we’ve done is that we’ve addressed some of the issues in terms earlier on the overstocks we’ve also stepped up our markdown rate in order to clear goods. Take a look at the Chico’s business that the markdown rate versus last year was up about 16% and White House, Black Market was pretty close to that as well. The thing you have to worry about is being overly promotional such that over time you can sell the customer inherently not to pay full price because eventually we markdown. You have to walk a fine line in terms of how much you can promote on your overstocks. I would like to think that second quarter we’re going to build some additional momentum in trimming the inventory levels. Adrienne Tennant – Friedman Billings Ramsey: Would it make sense to try to trim it very aggressively just to get ahead of the fall of in the comp cadence for the productivity of the stores?

Anytime we trim at this point we’re in the second quarter it comes at an expense. You either have to pay vendors cancellation charges or either go through jobbers or to like TJ Maxx or Ross stores. Each of those alternatives have a significant expense. I’d like to think what’s best for the business is to try to clear the goods in the front line in the outlet stores longer term since we can realize more margin dollars. We like to pick and choose our battles. Adrienne Tennant – Friedman Billings Ramsey: One last question on the field organization it sounded like you were changing the bonus structure. Can you talk about the bonus guarantees there and have you seen any field organization turnover as a result of that?

On the bonus side, as business really fell off the cliff last fall we stepped in and guaranteed stores and district managers and regional managers bonus dollars if you will. We took that away from them during the quarter and started setting more realistic store plans so that they could actually get the plan and get back into the bonus. We’re very careful at this point to weigh the unintended consequences anytime we deal with field payroll issues. We are in the middle of working on the new bonus structure. The field organization is highly involved with that from store manager position, district managers, regional managers and vice presidents together with the pay group and we’ve yet to roll the new bonus plan out but when we do we will also test is in certain districts and regions before we roll it out chain wide so that we don’t deal with unintended consequences as we did when we dealt with the hourly salary change two Decembers ago. We’re handling this with a lot of sensitivity.

Your next question comes from Michelle Tan – Goldman Sachs. Michelle Tan – Goldman Sachs: On the White House, Black Market business you mentioned the average unit retail was up 4% does that also go hand in hand with higher merchandise margins yet in that business or is that still coming in the higher average unit retail really a function of higher quality products?

The later, higher quality product, we haven’t seen improved merchandise margin because of those higher retail shift. Michelle Tan – Goldman Sachs: To clarify one question, if comp trend does not improve are you also trimming receipts so we will see inventory come down assuming the comps trend at this level or is reducing the inventory position also dependent on something.

I think it’s an ongoing thing. I’m not truly trying to be evasive but we’ll take advantage of opportunities. One of the things I’ve spoken about is the concept of fallout where there’s a certain percentage of your receipt plan that we don’t take delivery on either because we have quality issues or it’s late. It depends upon the retailers, it could be anywhere from 2% to 5% of your total receipt plan. We’ve just started tracking that for each of the businesses so we can use it as a tool on a go forward basis and know really how much in an attempt to quantify in a particular season how much fallout there really is. We do try to take advantage of that. We do try to trim units where we can as well. Michelle Tan – Goldman Sachs: As far as potentially [inaudible] inventories all the charge related you have been taken in the first quarter or might we see something else.

If there are any more charges I like to think of this as sort of a one time clean up for what amounts to be marked out of stock that hasn’t been taken for some time as well as some old inventory that’s gotten backed up in the outlet stores.

Your next question comes from Barbara Wyckoff – Buckingham Research Group. Barbara Wyckoff – Buckingham Research Group: I have three merchandising questions. First is can you remind me when the new accessory merchant started, the background of that person and a timetable for improvement? Second, Travelers it’s kind of a post peak fabric I thought the new person was in place and that we would start to see some improvement in June now you’re saying its fall. What has changed to push that timetable out, were the first goods late or are they not working and could it be that the fabric is like I said earlier post peak. Is it possible to replace part of that business with something else that does essentially the same thing? Third, what is the problem with the pant business overall is it because Travelers is so weak is there a lack of newness clearly there’s no new silhouette. Could you talk a little bit about the denim business the status what is cause the business to improve is it the length, improve silhouette. Could you talk about the size of the business and the price points in denim versus before.

That was five or six questions. I’m going to ask Michele to answer on Travelers, accessories and maybe you guys can go offline and hit the bottoms business.

The first question accessories, the new merchant started approximately four months ago. Has extensive background both in accessories and apparel. The real issue for me on the accessory business is we are still in search of a new head of product development. That is the critical open job at this point on that business. We are going to continue to leverage our vendor base which provides exceptional design work for us and we’re going to really reach out for them to leverage that expertise in the interim until we find this new lead of the product team at accessories. Under Travelers the issue is this, the mix of the business has really impacted our business. What we learned in the Travelers focus groups as well as what product we’ve seen sell we have remixed our business for third quarter to invest as Scott already highlighted and I’ll just reiterate it more novelty and we re-looking at color. Any place in the business that’s at basic business like black Travelers has been significantly impacted. As you know you can get fabric at a lot of different price points at a lot of different places. We have to provide products she doesn’t already have and that she can’t get anywhere else. We have committed to remixing the business in the third quarter and fourth quarter again we’re going to learn as we get into the categories but based on what we’re hearing and seeing looks promising. The business continues to be diminished as we’ve been indicating but there is still a loyal following albeit a smaller base but there is still a loyal following that we have to capture. Under the pant business the only headline I’ll give you without getting into all the details is its all about full price selling. The second we add an incentive to the bottoms business it moves the needle. However, not a long term strategy. Where we really saw the movement is in the tops part of the business specifically in the novelty and what we’re aggressively going after.

Your next question comes from Lorraine Maikis – Merrill Lynch. Lorraine Maikis – Merrill Lynch: It looks like you’ve taken the opportunity to close about seven underperforming Soma stores. I was wondering were there any common characteristics of these stores whether its location or anything else and also could you take this opportunity to look at some of the larger underperforming Chico’s stores and maybe exit some of your real estate commitments there.

Regarding the Soma closures the biggest commonality would be size and expense. One of the chief findings as we work through the launch of this business is the size of the store, the co-tenancy those types of things. If there’s any one commonality is we’ve closed larger stores that are expensive and we’re focused more on a store that’s in the 2,000 square foot range in the $60 a foot all in range max versus stores that we were paying $80, $90, $100 a foot for that were 3,000 square feet. That’s the biggest commonality. Regarding the larger underperforming Chico’s stores when you have a lease with Simon with General or with Taubman they expect you to honor that lease. On an ongoing basis we look at all underperforming stores we generally close somewhere between three to six or seven underperforming stores annually and we’re looking at all stores on an ongoing basis but I would not expect to hear coming out of Ft. Myers any fresh round of store closings relative to oversized Chico’s store or White House stores for that matter.

Some additional color on the stores we really don’t have that many that have a negative four wall contribution from a cash flow perspective. It just so happens that the bulk of those happen to be outlet stores and it’s pretty much because of the way we transfer goods from front line to outlet for the markdown costs. It’s more or less pre-designed if you will. There’s only maybe a handful in each of the businesses, Chico’s, White House, Black Market I’m speaking to front line stores where we actually have a negative four wall contribution but its not that significant.

Your next question comes from Margaret Whitfield – Sterne Agee. Margaret Whitfield – Sterne Agee: I was just curious if you could provide more color on your comments so that you did the surveys of your customers and gained insight into their apparel purchase behavior outside of Travelers that is?

I’m not going share much there. I believe that’s proprietary. I know there are a lot of people on the call. They confirmed a lot of things that we were hearing from our store business if you will with share. That’s relevant to where they’re shopping, they’re shopping habits. Back to the basics comment that Michele made there seems to be, they’re hesitant to reach for their wallet to pay full price for basics. For great items, for great novelty they will pay full price. Beyond that I think I’ll keep the focus groups pretty close the vest.

Your last question comes from Marni Shapiro – The Retail Tracker. Marni Shapiro – The Retail Tracker: Any update on the tax rate for the full year and could we get the actual square footage at the end of the quarter. My final question is on circulation at the company and then at the core Chico’s brand if you could talk a little bit about what the circulation was for the first quarter and any plans go forward across the brands.

On the circ plan we’ll get back to you on that one. The tax rate if you’re really look at where we are for the quarter it’s certainly the law of low numbers because the fact that we have most of the interest income arises from tax exempt obligations. If you look at the first quarter the tax rate looks artificially low. We think over the longer term it’s around 33% for this year. The square footage number at the end of the quarter is just under 2.5 million.

Thank you everyone for joining us on today’s call and we’ll talk to you next quarter.

Ladies and gentlemen this does conclude Chico’s first quarter 2008 earnings results conference call. You may now disconnect.