Cristina Fernández: Thanks. And then the last question I have is in relation to the SG&A dollars, you’ve been able to reduce those. They were down 10% year-over-year this quarter. I guess, where are you flexing the SG&A? Is it mostly the headcount reductions in the last year or are you also pulling back on marketing or other sort of expense buckets? Thanks.
Farooq Kathwari: Yes, actually it is mostly headcount and that is both in manufacturing and retail. The combination of technology has really had a tremendous impact in the business we are doing. We have actually somewhat increased our marketing relative to what we did in the previous quarters. Matt, how much in this quarter? How much did we win what is it at 4%?
Matt McNulty: Yes, marketing actually was up 24% year-over-year and was 3.4% of sales versus only 2.1% of sales last year, so we’ve increased it.
Farooq Kathwari: So we increased our marketing, and of course, compared to some of the lower sales, but marketing has increased. It really was what you mentioned, the reduction in headcount has been a major factor.
Matt McNulty: I would also add to some of that flexing down is variable in nature. So as sales, delivered sales do come or we’re down lower this year, variable compensation comes down, whether it’s designers selling compensation or delivery costs and we’re benefiting from lower fuel costs year-over-year, so that’s coming down on the SG&A line.
Cristina Fernández: Thank you.
Farooq Kathwari: Okay, Christina. Thanks very much.
Operator: Our next question today is coming from Budd Bugatch from Water Tower Research. Your line is alive.
Farooq Kathwari: Hey Budd, how are you? Is Budd Bugatch there?
Operator: Budd perhaps your phone is on mute. Please pick up your handset.
Budd Bugatch: There you go. You’re off mute now. There you go. I’m sorry. Sorry for that. Can you hear me now?
Farooq Kathwari: Yes, Budd, I am and how are you?
Budd Bugatch: I’m not bad for an old guy. I’m trying to catch up to you.
Farooq Kathwari: Budd, I don’t like to hear that. You’re just getting started.
Budd Bugatch: Well, we’re not old, we’re just getting older. I want to punch into that retail, the consumer adding back to the home and I hear you, and it’s one of our true failings. Just try to put numbers on things and you’re good with numbers, and you’re also good at sidestepping us when we want numbers. So let me see if I can get a couple of them. The backlog increased from the last quarter to this quarter by about, if I do it right, and not the backlog, but the customer deposits increased about $17 million from the second quarter to the third quarter. Is that about right, Matt? Is that, do I have that correct? And last year it was about a $29 million increase and is that reflective of what’s going on in terms of retail orders? How do you look at that?
Matt McNulty: Yes, that is correct. Sorry go ahead.
Budd Bugatch: No, go ahead Matt.
Matt McNulty: So what I was saying yes deposits are up year-over-year. Part of that was timing of when the orders come through in the quarter. But also it is reflective of, as Mr. Kathwari said, increasing focus on the home and a higher dollar volume of orders that we saw this past quarter compared to the last six to nine months, so the customer deposit balance did increase.
Budd Bugatch: Actually you gave us a backlog number for wholesale Matt. If you gave us one for retail, I missed it. What is the retail backlog at the end of the third quarter?
Matt McNulty: We typically do not disclose the retail backlog, although we do say it is approximately 2x that of customer deposits on hand.
Budd Bugatch: Okay. So the customer deposit is about 50% of what the backlog is. Okay of what an order is. And so when you look at Farooq, you’re talking about increased attention to the home. Are you really talking about what you’re seeing in April? Are you seeing or what you saw at the end of March? How do you — when did that begin and help us account for it?
Farooq Kathwari: Well, March was almost unique because Easter fell on March 31 and we were closed, and closed on the last day of the month is not a good day to be closed on. So that did impact the numbers in March. Now, of course, Easter is going to be in April this month. What we did see was just in the beginning right after the end of Easter, we could see more increase in business because the timing of the Easter did impact much, but I think that some of that business did also go into April. So I see that what we are seeing is, it’s still a start from, we still have to watch it carefully, but it’s somewhat of a positive start in April.
Budd Bugatch: Okay, that is helpful. When I had my retail business, I would always say that Easter or Passover was either late or early, but it was never on time and so that’s one of the…
Farooq Kathwari: Having it on March 31 is not a good day to have it.
Budd Bugatch: No, there’s not. It’s never good for the business. Okay, well, that really gets to the heart of my questions, is which is really and I think that’s the key for Ethan going forward, is to what is the viability? What’s the vibrancy of each thing in the consumer? And I know you’ve got a big plan to reduce the size of the design centers and make them more efficient, so we’ll see how that portrays into the numbers. But thank you for taking my questions.
