Now, North America Retail was clearly a disappointment for us. We did not experience the result that we expected. The environment continued to be very promotional and with less profit, especially during the second half of the quarter. The summer months brought a sharp decrease in visitors from Europe in the store. Business in our tourist location and especially in accessory stores were the least performing in the chain. These contributed to a comp store sales that fell short of expectations.

But regardless of traffic or tourist, the most challenging category continued to be accessories. We believe that our product line lacked value, key volume drivers and did not reflect the improvement we have made in the apparel line. We are committed to making the necessary change to reverse this trend and are working with our partner licensees to improve the product offering in our stores. In fact, the current handbag assortment in our stores is strong in my opinion and should improve the trend in that category for the holiday season and I am confident of that.

Our women apparel line continued to be the best performing category in our full price stores. The customer has responded very well to the woven top assortment that has been featured prominently in our floors, while our knit top business was soft and did not meet our expectation. We are addressing that with basic knit program at entry price.

Our denim line also continued to be successful in all our businesses, but we believe we have new opportunity in denim with new fit and printed denim. Our core customer is responding to the strategic decision to improve and elevate our product quality and position in the marketplace.

Other international places, large markets like Japan, Latin America, India and Eastern Europe remained key markets for Guess?, where we have light presence to address by either joint venture or direct operation. Our goal is to carefully invest in these new markets where we see tremendous potential for growth.

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