JWN
#Sure, Ed.
The comment around capital structure is, frankly, about those two items you mentioned but it's also about how we deploy capital.
I think one of the things you might have noticed in the last quarter that the amount of capital we invest in was almost equal to the amount of capital that we deployed back to shareholders.
The inference there is that we want to continue to have a very strong balance sheet and we want to allocate our capital in a way that delivers the best returns, both by reinvesting in the business and returning it back to shareholders.
So, that's basically what we're saying.
In terms of the leverage of the investment, certainly our intent and what we do is we wouldn't make these investments unless we thought we were creating value.
And we still expect them to create value.
I think one of the challenges we all face right now, we're still in relatively early stages, particularly in the e-commerce space, in terms of understanding how that model is evolving and the elements of that model that we need to find to be more productive.
So, we do expect to continue to create value.
We have a long-term aspiration to get back to that mid-teens ROIC, and that will come from these investments starting to generate some additional profit.
Hi, <UNK>, this is <UNK>.
I'll take a stab at that.
Topshop, we were six doors in the second quarter to get to 73.
And, you're right, we plan to be at least at 90 by year end.
That business is doing terrific.
I would highlight on that, our growth in Topshop is not just coming from new doors.
Our top store, some of our best business has been our original doors, at that.
They've been a terrific partner and have made, as great merchants do, those subtle adjustments to really deliver what the customer is looking for.
So, great shape in Topshop.
Brandy Melville we've launched in 15 doors.
I don't think we've announced any plans for expansion past that but it certainly would be our intention to have that be successful and get into some more doors.
Madewell ---+ I don't have ---+ 30.
15 to 30.
And then Shoes of Prey.
To date, we've been pleased with that test or that partnership.
And we're continuing, our shoe team led by Scott Meden, to work with those folks about future opportunities.
But today I think both sides are happy with how that's going.
<UNK>, this is <UNK>.
Yes, we are very happy with our Rack business.
My comments were ---+ and it was in the slides, I believe, as well ---+ that we saw 13% growth.
In <UNK>'s comments, as I recall, he highlighted that we've had 26 consecutive quarters of double-digit gains totally.
The big headline there is that that we're gaining market share there and it is meeting and exceeding our plans.
It's a terrific investment for the Company and our shareholder, and continues to be highly productive.
We recently just did some post audits in some of our newer stores and they are outperforming.
It's interesting, you talked about the online or e-commerce part of that business, we are new at <UNK>rack.com, and that it's married with HauteLook.
When you put those two together it was a 16% gain for the quarter.
The low single-digit comp increase was an improvement in the second quarter from the first quarter.
It's in keeping with our plans and we fully expect to meet our plans at year end.
So, so overall the Rack business is very strong and healthy and contributing in many ways.
Sure.
<UNK>, first thing is, I won't go into too much detail as it relates to 2016.
We like to share more of our thoughts on that plan in the coming February.
But that being said, starting with the East Coast fulfillment center, that's going online in the third quarter.
And the reason you see that large incremental change starting in the third quarter is because the asset goes into service and we start to recognize both the depreciation, as well as the cost of running that building.
Now, early on, that building isn't going to be quite as productive as it will be as our business continues to expand, so we will see some drag from that.
In terms of Trunk Club, Trunk Club is starting to anniversary the recognition of the acquisition accounting because we acquired that business last year at this time.
So, you're going to start to see the year-over-year impact of that start to fade.
But we'll certainly play that out more for you when we talk about 2016.
Yes, <UNK>, this is <UNK>.
The majority of that increase is related to fulfillment cost.
As we continue to see the online segment of the business growing at an accelerated rate, we're seeing variable costs related to that business go up.
<UNK>, you did pick us up a little bit on that.
We didn't quite go into that level of detail the way you explained it.
But what I will say is that part of the issue in the gross profit line, while we have seen some mixes within the business, we also see the Rack growing at a rate that's faster than the rest of the business, which on that line, on that gross profit line, does have an impact of putting a little pressure on that line.
But in terms of those other components, we really didn't get into that level of detail.
And I think what we guided for the balance of the year is consistent with where we expected business to be just several quarters ago.
Well, that's kind of a leading question <UNK>.
What I'll say to that is that we continue to evaluate all our options on there.
We have a diverse base of shareholders and we've gotten input at various levels of input and we're evaluating that.
We haven't made a decision yet as to exactly what we're going to do.
But I think keeping in line with the fact that we like to keep things balanced and we like to consider all our alternatives, those that you mentioned are part of that.
Sure, <UNK>.
On the categories, as we mentioned, there are customer departments that were a standout.
Dresses were good.
We saw strong business in denim, Women's in particular.
Men's tailored clothing was a stand out in our Men's area.
Below our average I think two areas that have gotten some attention, watches and handbags, two areas that had a number of years of outsized growth have been below the average.
I think that's pretty cyclical.
It's hard to be above the average every single year.
But those areas I would call out.
For the Trunk Club's inventory, to-date it's been a Men's business.
They buy their own inventory.
We have found some opportunities for our merchandising group to help them.
But Trunk Club for women is really a transformational effort for our two teams, much like launching <UNK>rack.com was for our HauteLook team.
That was an initiative that really brought our teams together.
It had to be executed in a highly integrated way.
Trunk Club for women is the same.
To execute that successfully our teams need to work together.
We will be leveraging our women's inventory to support that business.
We'll be buying a little bit extra for it but mainly leveraging our <UNK>.com inventory that is housed in our Cedar Rapids fulfillment center.
We've been piloting Trunk Club for women since the beginning of the year, slowly ramping that up.
The customer response has been very encouraging.
And we're on track, as <UNK> mentioned, to have a full launch in September.
And we're darned excited about it.
