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#Yes.
We continue to watch our expenses well, considering the fact that we have been investing in new design centers, and keeping in view that all these new design centers have generally higher expense relative to sales, which we have been absorbing also.
It is reflected in our operating earnings.
We also continue to watch what we spend in our marketing.
And our expenses that did go up, they were all directly related to the increase in sales.
So overall, we are a vertically integrated Company, so we have to watch our expenses even though ---+ as we continue to see some greater increase in the medical costs.
And that is what we're absorbing as well.
But overall, very, very good control by all of our teams at the various parts of the business.
Yes, well, these are challenges.
We do have very strong programs.
We have a strong marketing program in April, which is this month.
A very strong one in May.
And then in June, we will be introducing again a fairly strong marketing program of introducing Buckhead, that's our new program.
We have ---+ also, there's one thing you've got to note that last year we did benefit in the month of June from a price increase that we took in early July.
This year, that is not the case.
We were considering that, but we are not going to take a price increase on July 1 as we did last year.
But that might have some impact on our written business towards the end of June.
But overall, we feel comfortable.
We are positive with all the initiatives that we have in place that we should ---+ we have an opportunity of continuing to increase our business.
Yes, <UNK>, and that's a very important issue, a big challenge.
This quarter, we also introduced the custom quick ship.
This is an important program.
This reflects our upholstery programs, selected product programs and selected fabrics where we are now delivering them within less than 30 days custom all across the United States.
Well-received because not only is it faster delivery on custom, but we intentionally could offer them at very attractive pricing, which has attracted us not only our current customer base.
But we are starting to see new customers, especially as you can ---+ especially younger people, the Millennials.
So we are starting to make that impact.
And I think that our new product program ---+ especially the Buckhead, Santa Monica and Brooklyn ---+ are more geared towards ---+ on our total customer base but certainly towards what you might say the younger customers as even more so than we did in the last year.
Because what we introduced last year were more of the classic product lines, whether what we call the Georgetown or the European classics.
And then finally, of course, the Ethan Allen Disney has a great opportunity of getting us children and their parents.
Yes.
As <UNK> mentioned that while on the wholesale side we did have lower shipments because of the fact that they had placed some fairly large orders during the last year's this quarter.
We do know ---+ we did get information that on the retail side, their business was up.
Considering, of course, all the issues that one is hearing in China, they are holding up.
We have spent a great deal of time with our Chinese partner in renovating and even helping them relocate some of their key design centers in places like Beijing and Shanghai.
So, well-positioned in China.
We have also continued to make progress in some of our design centers and in the Middle East.
And we have also a stronger program in Germany, where they are small locations, but we expect seven or eight of them to be opened up in the next six or seven months.
And also we are opening one in Taipei, a new one, and also in Mexico City.
So, making progress.
But, of course, our biggest opportunity still remains right here in North America.
No, my voice is ---+ it doesn't hurt me.
It just is hoarse; that's all.
Thanks, <UNK>.
Yes, <UNK>, good questions.
Our retail network operated by the Company is going through a number of changes.
Two important ones are that on one hand, we are consolidating.
And on the other hand, we are opening new ones.
For instance, within this last quarter we consolidated a design center in Colorado Springs.
A few years back, we had opened up a major ---+ really a flagship design center in a place called Centennial, which is also in the metro Denver area.
Now, because of the fact of our marketing today and our interior design focus, rather than a commodity selling, we believe that the Centennial can take and is out taking the business that was being done in Colorado Springs.
In fact, we sold that property for approximately $4 million.
I think it just closed about a week or so back.
So on one hand, what's going on is the consolidation to take advantage of our important design centers.
Because the costs of operating in, let's say, those two markets is not very efficient.
We are talking our real estate costs, the management costs, people costs ---+ having one great design center is important.
For instance, also recently we consolidated one in the Toronto market in an area called Burlington.
We consolidated it because we have three other strong design centers that are starting to take that business.
So that's the reason sometimes you'll see that our numbers are getting lower.
But overall, it's important for us.
So that's on one hand.
On the other hand, we are going to go ---+ getting back into markets, which I mentioned earlier, 40 or 50 of them that we used to be there.
Like, for instance, this last year we opened in Wichita, Kansas.
We opened in Toledo.
We are just in the process of building one in Savannah.
All markets that we were not in and we're going to go back in.
So when you take a look at our number is 302 now and our Company design centers, while it's remained at the end of the period at 141, the fact is the composition is much better.
So you going to see the 141 being stronger.
We're going to continue where it makes sense to consolidate and open new ones.
But when we consolidate, the opportunity of taking business to existing ones is an important one.
So that's what you are going to see.
Yes, overall, from 302, it's going to go up.
But the strength of our design center does not just reflect in the numbers.
<UNK>, you can talk, too, but I think our capital expenditures will more or less be similar to last year.
Oh.
The expense was more last year because last year we were really repositioning all the floors.
Oh I see, (multiple speakers) expense.
Putting new flooring in, painting, lighting.
So it's less this year on the remodeling.
On the new locations, though, with the relocations, some of that does flow through to P&L before the design center is even open, and that's reflected just in our operating expenses.
Yes.
Like ---+ okay, like we are just opening one in Manhattan.
And our retail division, management was a bit surprised even though we have a free rent for, I don't know, six or seven months.
But they started seeing hitting it hit right away.
And Manhattan costs, as you know, it's pretty high.
So we are already expensing it.
And we are expensing in a number of these relocations.
The new ones, we do expense them like three or four or five that we are going in.
We don't ---+ we are not showing them separately because, <UNK>, we did it last year, too.
So we don't want to show these numbers separately because it is an ongoing process.
It's hard to say.
But based on the past history, you're talking about on an annual basis about $40 million, $50 million.
And so now it depends how many folks they give it to.
That's right.
They will do it at least two.
<UNK>, our e-commerce is up substantially, but from a very small base.
So we are still just getting started.
What we are doing, what we are seeing is that ---+ and as you can see, some of our advertising ---+ like, for instance, right now, this month we say that you can come in, you can start something beautiful.
Come into a design center and get 25% savings on two items.
Not on e-commerce; they've got to come to the design center.
Now, this is an intentional marketing thing that we have done to bring people into our design centers.
Because when they interact with our designers, who also make home calls, we have larger business and a client rather than a transaction.
Having said this, you are going to see us also improve our e-commerce.
For instance, we had, again, from a very small base a reasonably strong sales on the custom quick ship.
Because it's easier to buy, and it's limited fabrics, fast delivery.
And I would say that we are right now in the process ---+ again ---+ are taking our website to the next level.
And perhaps <UNK>, you just started on this.
You may want to tell them what we are doing.
Yes, we are right in the process of upgrading our website to the new site genesis, which will be the latest features that the demandware platform offers.
It's a nice uplift.
And that will also be the basis for our Ethan Allen Disney home line, which will be the separate site that will be a different look, different experience, much more geared for the magic of Disney.
And we are very excited to get that launching this fall to coincide with the launch of the new product programs.
Well, as you know, we are ---+ we continue to use our capital well.
We have increased our dividends.
We have also continued to buy about $20 million of stock.
Last year, we were thinking of raising debt but the markets were not good.
We'll keep an eye open for that.
But I think our objective is to make sure that we continue to strategically buy our shares as we move forward.
So you're going to see us to continue to look at buying our shares as we have been doing.
Now, keep in mind, we have bought over 41% of our Company back.
Thanks very much.
Yes, it was a great event for them.
They raised a fair amount of money there, <UNK>.
<UNK>, there are different elements of our business.
Quick ship in upholstery is, at this stage, limited to a limited number of frames and fabrics.
The final product is made in our Maiden plants.
We've got three upholstery plants there.
And I think on an average they are shipping in less than 10 days custom products.
That's very important.
Then on the other hand, as you know, almost still 70% of our business is custom.
Even this custom quick ship is custom.
So, we have reduced the timeframe, even considering the fact that our manufacturing has to cope with a lot of new products.
We have taken a certain amount of our case goods and made them quick-ship, especially the ones that come from offshore.
So at this stage, most, I would say close to 80% of our product is shipped within four to six weeks, the custom product from our North American manufacturing.
Well, in April, we took about, I would say, 40%, under 50% of our products, which we called iconics, our great products.
And we said that those product lines will be able to have a savings of up to 20%.
Then in addition to that in April, we offered a family, one customer the opportunity to buy any two of these iconics at a savings of 25%.
That's the main offering.
We, of course, have other offerings, like we do have good financing programs.
Now, I cannot tell you what we're going to do in May.
But in May, we'll have a strong program.
And then in June, we will be introducing Buckhead in somewhat of a more prominent way.
And you'll see that as we go into ---+ we want to make sure people see the difference.
It's a beautiful product line, well-designed, very well received.
And I think you saw it, too, when you were here.
And it's finally getting into our design centers and in June, we'll be marketing it.
So that's a strong program right through the fall of this year.
Yes, <UNK>.
What you are seeing is you are right.
In March, we were impacted by Easter in the last week of the month.
Those customers decided to wait, and for lots of reasons.
And, of course, we also have the spring break at that time.
In April, we have had a much higher traffic.
People are working hard, but in the next five days will determine as unfortunately or fortunately, it ends up the five days, we get about 40% of the business.
So in the next five days, 30% to 40% of the business is done in the last four or five days.
It looks promising.
But until we get it, you know, I cannot tell you that it is here.
All right, <UNK>.
That's a good question, <UNK>.
I think that ---+ <UNK>, you may want to take a look at it.
But all I know, our discounting this quarter is higher than the quarter last year.
And on the other hand ---+ in addition to that, <UNK>, we still are clearing a lot of products from our floors because all these new products coming in that have come in the last six months, we have to sell still a lot of products.
So while our gross margins overall were positive, they increased.
And as <UNK> said, part of it was the fact, higher proportion of retail to total business, better gross margins and efficiencies in our manufacturing.
On the other hand, our retail had lower gross margins because of this clearance of products.
That's going to continue.
You're going to see us have lower margins on clearance but higher margins on efficiencies of manufacturing and logistics.
I don't have all of the tickets.
More or less as an average ticket of about close to $1,800, stayed about even.
Traffic actually was higher between 5% and 10% higher.
So it really was realizing more from the people who came in.
Yes, it was about a $500,000 gain on the sale.
In Pittsburgh.
In Pittsburgh, yes.
And, again, we closed sort of an old freestanding location and then opened up the one I just referred to, which is in a lifestyle center, a leased property.
All right, Valerie, thank you.
And thank you to everybody on the call.
And any questions and comments, please let us know.
Thanks very much.
